By Sarah Mcfarlane

--Oil prices fell sharply Tuesday on a combination of negative factors, including spillover selling pressure from global equity markets and rising output in key producers.

--West Texas Intermediate futures, the U.S. oil standard, were down 2.7% at $48.53 a barrel on the New York Mercantile Exchange.

--Brent crude, the global oil benchmark, was trading down 1.5% at $58.72 a barrel on London's Intercontinental Exchange, having earlier sunk to $57.20, its lowest level since October 2017.

 
  HIGHLIGHTS 
 

Global Markets: European and Asian stocks fell on Tuesday following a sharp drop on Wall Street at the start of the week, with investors nervous about the outlook for global economic growth. "There's been a correlation between equities and oil prices in the last week or so, so it's [selling pressure] spilling over from equities into oil prices," said Michael Poulsen, oil analyst at consultancy Global Risk Management.

 
  INSIGHT 
 

Rising output: News reports Monday, which were negative for oil prices, included data showing Russian crude production was higher in the first two weeks of December versus November and the return of the Buzzard field in the North Sea after supply disruption, said Giovanni Staunovo, commodity analyst at UBS Wealth Management. Meanwhile, plans by the Organization of the Petroleum Exporting Countries to cut output are yet to be implemented. "The cuts will only be implemented in January, we're still in December, the only one that's cutting is Saudi Arabia," said Mr. Staunovo.

Shale Growth: Data on Monday from the U.S. Energy Information Administration's monthly Drilling Productivity Report showed U.S. oil production from seven key shale regions is expected to rise to a record-high 8.2 million barrels a day next month, versus 8.0 million this month. It also showed shale regions continue to increase the amount of so-called DUCs -- drilled-but-uncompleted wells -- which means they'll continue to be able to ramp up production. "EIA's latest drilling productivity report layers on bearishness, as producers keep getting more productive and building DUCs," said analysts at Baird in a research note Tuesday.

 
  AHEAD 
 

The American Petroleum Institute releases its weekly statistical bulletin at 4:30 p.m. ET Tuesday.

 
--Dan Molinski contributed to this report. 
 

Write to Sarah McFarlane at sarah.mcfarlane@wsj.com

(END) Dow Jones Newswires

December 18, 2018 10:07 ET (15:07 GMT)

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