The price of oil tumbled more than four percent, putting them at their lowest levels since September 2017. US light crude oil fell $2.35 a barrel, or 4.9 percent, to a low of $45.82. Just before 13:00 GMT, the price had recovered slightly to $46.69 per barrel. At its lowest today, North Sea Brent dropped down $2.60, or 4.5 percent, to a low of $54.64 a barrel.
Xi Jiarui, chief oil analyst at consultancy JLC, said: “Investors quickly moved their attention to deteriorating fundamentals in the oil markets.
“This is including more signs of slowing economic growth next year, record production and the lack of confidence with OPEC’s pledge to curb production.”
The Organization of the Petroleum Exporting Countries (OPEC) and other oil producers including Russia agreed this month to curb output by 1.2 million barrels per day to try and tackle a glut in supply.
OPEC will cut 0.8 million barrels per day from January with additional contributions of 0.4 million barrels per day of cuts.
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But the cuts will not happen until next month, and production has been at or near record highs in the United States, Russia and Saudi Arabia.
Saudi Energy Minister Khalid al-Falih said he expected global oil stocks to fall by the end of the first quarter, but added that the market remained vulnerable to political and economic factors as well as speculation.
OPEC has come under pressure in recent weeks from United States President Donald Trump, who urged the organisation to make oil cheaper by refraining from output cuts.
US crude inventories fell by 497,000 barrels in the week to December 14, the US Energy Information Administration (EIA) said.
This was smaller than the decrease of 2.4 million barrels analysts had expected.
Distillate stockpiles, which include diesel and heating oil, dropped by 4.2 million barrels, the EIA said, versus expectations of a 573,000-barrel increase.
Saudi Energy Minister Khalid al-Falih said he expected global oil stocks to fall by the end of the first quarter, but added that the market remained vulnerable to political and economic factors as well as speculation.