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 US:CLF9 US:CLF9 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.

“ ‘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.’ ” — David Madden, CMC Markets UK

February Brent UK:LCOG9, the global benchmark, tumbled $3.35, or 5.6%, to $56.26 a barrel on ICE Futures Europe—for the lowest finish since October 12, 2017.

Kicking off Monday’s losses, commodity data provider Genscape reported that Cushing, Okla., crude inventory rose by 630,000 barrels last week, which analysts said was bigger than expected. And in its monthly Drilling Productivity report, the Energy Information Administration on Monday predicted a rise of 134,000 barrels a day in U.S. shale oil production for January to 8.166 million barrels a day.

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“Enveloping supply concerns is the increasing likelihood of a protracted economic downturn in China that continues to stoke fears of demand slowdown,” said Stephen Innes, Asia Pacific head of trading at Oanda.

“As usual, oil markets are all about the basics of supply and demand, so when excess amount crosses paths with a bearish global growth outlook, it provides an exceedingly bearish signal for oil prices which have only one place to go, and that’s down,” he said in a daily note. With the "market struggling for direction, oil prices were very prone to shifts in risk aversion, but when global growth concerns trigger risk off it’s hugely negatively impactful for oil prices.”

Oil has been under pressure amid a general investor unease over perceived riskier assets, including stocks and commodities. All three major U.S. stock indexes have been pushed into correction territory, and Monday’s losses — the Dow Jones Industrial Average DJIA, +0.19% retreated over 500 points — extended the worst start to a December since 1980.

Bearish momentum has been consuming investors for weeks and much may be riding on a two-day Federal Open Market Committee meeting that began Tuesday. The Fed is expected to raise interest rates, though there have been loud calls for the central bank to hold back on that move, especially given market volatility.

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Key weekly data on U.S. petroleum supplies will be released Wednesday by the EIA. On average, analysts surveyed by S&P Global Platts expect the government agency to report a decline of 3 million barrels in crude supplies. The survey also forecast a supply rise of 2.6 barrels for gasoline and a decline of 900,000 barrels for distillates.

The American Petroleum Institute, a trade group, will issue its own report on domestic petroleum inventory late Tuesday.

Back on Nymex, January gasoline US:RBF9 slid 4.3% to $1.351 a gallon, while January heating oil US:HOF9 shed 4%, to $1.754 a gallon.

Bucking the trend in the energy sector, January natural gas US:NGF19 jumped 8.8% higher to $3.838 per million British thermal units. They managed to bounce back a hefty Tuesday loss, when forecasts for warmer-than-usual weather dulled demand for the heating fuel and pushed prices down by 7.8% to their lowest since Nov. 2.