Oil Prices Continue to Skid

Oil futures have posted their biggest one-day declines in more than three years on fears of expanding suppliers and shrinking demand.

Brent crude, the global benchmark, dropped 7% to $65.47 per barrel on Tuesday. West Texas Intermediate, the U.S. standard, fell 7% to $55.69, its lowest price so far this year.

Traders were responding to reports that October oil production by the Organization of the Petroleum Exporting Countries rose by 127,000 barrels per day. Russia’s output climbed by 50,000 bpd. The two increases more than offset a 156,000-barrel drop by Iran. Increased output by U.S. oil producers has added to the resulting glut.

At the same time, OPEC has lowered its growth forecast through next year, citing weakening petroleum demand in Asia and the Middle East. The cartel will meet in Vienna next month to discuss possible production cuts.

Oil prices have been sliding—by 27%, in the case of the U.S. benchmark—since the beginning of October. In September, prices were surging on the mistaken assumption that U.S. sanctions on Iran would create a petroleum shortage.