West Texas Intermediate oil futures are down $US1.29, making the price of a barrel nearly $US43 on the futures market. Prices are at a seven-month low, as prices in November reached intraday lows of $US42.20.
The fall is mostly the result of residual anxiety over high supplies in the market.
Libya has been increasing its output in recent weeks to fuel its recovery from recent political turmoil. The country is part of OPEC, but is exempt from production caps set by the collective due to the ongoing political unrest.
Other OPEC countries have agreed to cut supplies through 2018, but not by as much as investors had hoped.
Domestic oil is in high supply now as well. The number of oil rigs has been increasing for a record number of weeks, and oil reserves have been surprising investors in recent weeks.
The price of Brent crude oil futures is down a similar 2.8% to $US45.59 on Tuesday.
Get the latest Oil WTI price here.
Business Insider Emails & Alerts
Site highlights each day to your inbox.