London: Oil prices fell more than 2 percent on Tuesday, dropping for a third consecutive session as reports of swelling inventories and forecasts of record U.S. and Russian output combined with a sharp sell-off in global stock markets.

U.S. crude oil dropped $1.36 or 2.7 percent to a low of $48.52, its weakest since September 2017, before recovering to around $49.00 by 0840 GMT.

North Sea Brent crude fell $1.51, or 2.5 percent, to a low of $58.10 and last traded around $58.61, down $1.00.

Both benchmarks have shed more than 30 percent since early October due to swelling global inventories.

‘A large part of the move (lower) is due to a broader market sell-off, with both U.S. and Asian equity markets coming under pressure,’ said commodities strategist Warren Patterson at Dutch bank ING in Amsterdam.

‘Specifically for the oil market, there are no clear signs yet of the market tightening,’ he added.

The Organization of the Petroleum Exporting Countries and other oil producers agreed this month to curb production by 1.2 million barrels per day (bpd), equivalent to more than 1 percent of global demand, in an attempt to drain tanks and boost prices.

But the cuts won’t happen until next month and meanwhile production has been at or near record highs in the United States, Russia and Saudi Arabia, undermining spot prices.

Russian oil output hit a record 11.42 million bpd this month, an industry source familiar with the data told Reuters.

Oil production from seven major U.S. shale basins is by the year-end expected to climb to more than 8 million bpd for the first time, the U.S. Energy Information Administration said on Monday.

Inventories at the U.S. storage hub of Cushing, Oklahoma, delivery point for the oil futures contract, rose more than 1 million barrels from Dec. 11 to 14, traders said, citing data from market intelligence firm Genscape.

The United States has surpassed Russia and Saudi Arabia as the world’s biggest oil producer, with total crude output climbing to a record 11.7 million bpd.

With prices falling, unprofitable shale producers will eventually stop operating and cut supply, but that could take some time, and meanwhile inventories keep growing.

‘Rising U.S. shale production levels along with a deceleration in global economic growth have threatened to offset OPEC+ efforts,’ said Benjamin Lu Jiaxuan, at Singapore-based brokerage Phillip Futures.

‘Market confidence remains extremely delicate.’