Oil prices plunged Tuesday in the sharpest single-day decline since the days of the last oil bust in 2015.

Crude fell 7 percent in New York to just over $55 a barrel, extending its recent losing streak to a record 12 trading sessions and falling to its lowest level in a year. Oil has slid 27 percent since its recent peak of about $76 a barrel in early October.

The plunge is creating anxieties in the Houston energy sector, where memories of the last oil bust are still fresh. Consumers, however, will enjoy lower gasoline prices as they travel for the Thanksgiving holiday.

The recent collapse in crude prices is primarily a supply-and-demand story. Just over a month ago, traders were betting on a supply crunch as U.S. sanctions took Iranian oil off the market and production dwindled in crisis-ridden Venezuela.

Today, the focus has returned to potential glut as U.S. production has soared to a projected record of 11.6 million barrels a day and inventories have increased by millions of barrels in recent weeks. The world’s other top producers, Russia and Saudi Arabia, also have increased output, while Iran likely will export more oil than anticipated after the White House last week granted waivers from sanctions to some of the world’s biggest energy consumers, including China, India and Japan.

President Donald Trump on Monday contributed to market’s jitters by calling on OPEC to produce more oil to keep fuel prices low. Those jitters turned to panic on Tuesday after the Organization of the Petroleum Exporting Countries revised its global oil demand projections downward for 2019 because of softening economic growth.

“I’m increasingly more concerned than I was just two weeks ago,” said Jim Wicklund, an energy analyst at the financial services company Credit Suisse in Dallas. “I don’t know where the oil price bottoms. I just don’t see that much excess supply and that much evaporation of demand to warrant this.”

Oil settled at $55.69 a barrel, down $4.24.. At those prices, the U.S. shale sector can keep churning along, Wicklund said, but the rapid decline could set back the recovery of the deepwater energy sector another full year.

Related: Global economy will depend on U.S. shale to meet oil demand growth

The spotlight will now shine on the next OPEC meeting Dec. 6 as the cartel, led by Saudi Arabia, considers whether to scale back its output to help lift oil prices. After all, it was the OPEC decision in late 2014 to keep production high that helped trigger the last oil bust that sent prices from about $100 a barrel to a low of about $26 in early 2016.

Russia, while not a member of the cartel, would be expected to act in concert with OPEC, energy analysts said, but it’s not a given the Russians would agree to cutbacks.

“Shale producers in the U.S. need to be on their guard as they have been since 2014,” said Ed Hirs, an energy economist at the University of Houston. “The Saudis and Russians, along with other OPEC members, have the ability to take dead aim at the U.S. shale plays.”

Houston-area gasoline prices have fallen an average of about 25 cents per gallon in just more than a month, and more declines are on the way. Motorists who can should hold out another few days before filling their tanks in order to capture additional savings before Thanksgiving, said Patrick DeHaan, head of petroleum analysis for GasBuddy, which tracks fuel pricing nationwide.

“(Tuesday’s) market plunge was astounding, and a dramatic turnaround in market psyche in the last month,” DeHaan said. “The sell-off will extend and accelerate the declines seen at the pump, just in time for Thanksgiving.”

jordan.blum@chron.com

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