There was a 4% drop in oil prices on Tuesday after reports of swelling inventories. In addition, forecasts of record U.S. and Russian output combined with a sharp sell-off in stock markets weighed further.
U.S. crude oil dropped $2.04, or 4.1 percent, to a low of $47.84, its weakest since September 2017, before recovering to around $48.55 by 1140 GMT.
North Sea Brent crude lost $2.41, or 4.0 percent, to $57.20, a 14-month low. It last traded around $58.21, down $1.40.
Both crude oil benchmarks have shed more than 30 percent since early October due to swelling global inventories.
World stock markets tumbled on Tuesday as fears about a slowing global economy gripped investors, just as the U.S. Federal Reserve looked set this week to deliver its fourth interest-rate hike of the year.
Germany’s Ifo economic institute said its business climate index fell for the fourth month in a row to its lowest in over two years, adding to the worries about global growth.
START TRADINGForex – Commodities – 4% drop in oil prices on oversupply fears
The euro rose on Tuesday as the dollar weakened. Investors bet that growth concerns will prompt the FED to slow pace of interest rate hikes at this week’s meeting.
The mood on Tuesday was less positive for the greenback. The dollar index 0.2 percent lower at 96.931 after losing 0.4 percent on Monday. Last week, the dollar enjoyed its best weekly performance since September, reaching an 18-month high.
The yen gained about 0.3% on the dollar as investors’ fears of slowing global growth increased demand for safety assets.
The Swiss franc, another safe-haven, also tacked on 0.2%.
Sterling, which has been heavily sold off in the past few months on Brexit uncertainty, held steady at $1.2653.
The Australian dollar firmed to $0.6845, buoyed in part by improved business confidence data.
Sources: Reuters, CNN money, Bloomberg
PLEASE NOTE The information above is not investment advice.