Oil prices have dipped to their lowest level in nearly one year due to an emerging crude supply glut and a worsening global economic outlook.

Brent crude oil futures went down 47 cents, or 0.8%, to $62.13 a barrel. Earlier in the day, the contract slumped to its lowest since last December at $61.52, Reuters reported.

US West Texas Intermediate (WTI) crude futures fell 2.3% to $53.38 a barrel, recovering from $52.82 hit earlier.

On 20 November, WTI prices touched the $52.77 level, which was the lowest since October 2017.

The price slump comes amid record Brent and WTI price volatility levels this month. Such levels were last observed during the 2014-2016 period when markets plunged to record lows on a supply glut.

“Considering the drop in demand, Saudi Arabia indicated a possibility of output reduction.”

Global crude oil supply has increased this year, primarily due to the surge in US output and support from two other major producers, namely Russia and Saudi Arabia. The three countries collectively pumped more than a third of the global consumption.

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US investment bank Jefferies was quoted by the news agency as saying: “The market is currently oversupplied, an oversupplied market has a difficult time setting a (price) floor.”

Markets are worried about the weakening demand outlook caused by a global economic slowdown.

Shanghai stocks reduced by 2.5% on 23 November, amid growing concerns over China’s economic growth.

Brent and WTI prices hit four-year highs early last month and have since lost 30%, due to excess supply in the market.

Considering the drop in demand, Saudi Arabia indicated a possibility of output reduction.

Speaking to reporters, Saudi Arabia Energy Minister Khalid al-Falih said: “We will not sell oil that customers don’t need.”

The kingdom is pushing OPEC to resort to withholding output by as much as 1.4Mbpd.

OPEC members are set to meet next month to discuss the supply situation and expected to reach an agreement regarding the potential supply cuts.