Oil prices dropped 10% this week, falling below $60 a barrel for the first time this year. Record U.S. oil production is raising crude inventories. The CNN reports that investors worry that demand won't keep pace with the increased supply.
U.S. crude producers pumped out an average 9.3 million barrels a day in 2017 and will average 10.6 million this year, according to a U.S. Energy Information Administration report this week.
"The market is adapting to the fact that we are going to have oil inventories increase," said Rob Thummel, a portfolio manager at energy investment firm Tortoise Capital.
The stock market's volatile week has also pressured prices, because investors pulled money out of stocks and took safe haven in the dollar, Thummel noted. Oil prices are tied to the dollar and tend to move in opposite directions: When the dollar rallies, oil becomes less attractive to overseas investors.