Crude oil prices plunge over 7%

Oil futures tumbled on Tuesday, with a more than 7% loss sending benchmark U.S. crude prices to their lowest finish in nearly 16 months, as concerns over a potential global supply glut rattled the market.

Losses for oil intensified in late-morning dealings after it was reported that Russia was increasing its output to 11.42 million barrels a day this month, said David Madden, market analyst at CMC Markets UK. “That would be a record, if it turns out to be true.”

“Major oil producers can talk about coordinated production cuts all they want, but at the end of the day they usually pursue their own interests,” he said. Members of the Organization of the Petroleum Exporting Countries and some nonmember allies agreed earlier this month to cut production by 1.2 million barrels a day, but the change doesn’t go into effect until the start of the new year.

January West Texas Intermediate crude CLF9, -0.17% CLF9, -0.17% dropped $3.64, or 7.3%, to settle at $46.24 a barrel on the New York Mercantile Exchange. The settlement marked the lowest finish for a front-month contract since August 30, 2017, according to Dow Jones Market Data. The January futures contract expires at Wednesday’s settlement.