Oil prices tumbled more than 7 percent, with U.S. crude plunging to its lowest in over a year, caught in Wall Street`s broader selloff fed by growing concerns about slowing global growth.
U.S. West Texas Intermediate (WTI) crude futures were down $4.24, or 7.4 percent, at $52.96 per barrel by 1:27 p.m. EST (1827 GMT). The contract fell as much as 7.7 percent earlier in the session to $52.77 a barrel, the lowest since October 2017.
So far in the session, more than 836,000 front-month WTI contracts had changed hands, exceeding the daily average over the last 10 months.
Brent crude futures were $4.77, or 7.1 percent, lower at $62.02 a barrel. The international benchmark fell as much as 7.6 percent to $61.71, the lowest since December 2017.
Tuesday`s drop extended a slide that has been largely unimpeded since early October. WTI prices are more 30 percent lower from near four-year peaks hit in early October, weighed down by surging supply and the selloff in risk assets worldwide.
Brent has lost about 28 percent in the same period.
“For the time being it`s more about risk,” said Jim Ritterbusch, president of Ritterbusch and Associates.
“When the stock market comes off 8 or 9 percent, it tends to conjure up images of a weak global economy and that feeds into expectations of weaker than expected oil demand.”
The S&P 500 hit a three-week low on Tuesday as weak results and forecasts from big retailers fanned worries about holiday season sales, while tech stocks continued to slide on concerns about iPhone sales.
Global stock markets have suffered a shakeout in the past two months, pressured by worries of a peak in corporate earnings growth, rising borrowing costs, slowing global economic momentum and international trade tensions.
Amid the uncertainty, financial traders have become wary of oil markets, seeing further downside risk to prices from the growth in U.S. shale production as well as the deteriorating economic outlook.