The price of oil slumped 7 per cent last night to its lowest level in 11 months amid fears of a global economic slowdown.
So far in the session, more than 836 000 front-month WTI contracts had changed hands, exceeding the daily average over the last 10 months.
Futures for January delivery fell as much as 6.2% in NY.
Oil's slide has been largely unimpeded since early October when WTI prices were near four-year peaks. PetroChina's shares, for example, have only declined 14% since Brent crude topped out on October 3.
"When the stock market comes off 8%-9%, it tends to conjure up images of a weak global economy and that feeds into expectations of weaker than expected oil demand", says Jim Ritterbusch of Ritterbusch and Associates. The investment bank found that since 1990-excluding the abnormal market behavior during the global financial crisis-WTI Crude typically gains 5.5 percent over the following month and rises 7.3 percent in the following three months after a plunge.
Amid the uncertainty, financial traders have become wary of oil markets, seeing further downside risk to prices from the growth in United States shale production as well as the deteriorating economic outlook.
President Trump opposes the cuts.
A belief that the market is oversupplied due to production increases by the world's top crude oil producer, the United States, has led to concern about a supply-demand imbalance.
The number of long positions in Brent Crude slumped to their lowest in almost three years in the week to November 13, but the long positions in WTI Crude slightly edged up by less than 1 percent, snapping a six-week-long streak of weekly drops in longs.
USA crude oil inventories posted a drawdown of 1.545 million barrels in the week ending Friday, according to statistics released on Tuesday.
Wednesday's gains came after a report by the American Petroleum Institute late on Tuesday that USA commercial crude inventories last week fell unexpectedly by 1.5 million barrels, to 439.2 million, in the week to November 16.
The API release is scheduled for 4:30 p.m. EST (2130 GMT), followed by government data on Wednesday morning.
The rising drilling activity points to a further increase in U.S. crude oil production, which has already jumped by nearly a quarter this year, to a record 11.7 million bpd.
OPEC nations will meet on December 6th to discuss further output cut deal.
Faced with high oil prices and the prospect of its negative impact on the mid-term elections, US President Donald Trump leaned on Saudi Arabia to use its influence as the defacto leader of OPEC and its budding ties with Moscow to persuade the grouping's members and Russian Federation to ramp up production.