ENERGY FUTURES : Glut Drags Oil Prices Below $18 a Barrel

Crude oil prices, depressed by bulging U.S. inventories and OPEC overproduction, tumbled Tuesday to close below $18 a barrel for the first time since August.

On the New York Mercantile Exchange, crude oil futures for May delivery finished at $17.68 a barrel, down 76 cents.

Expectations that an American Petroleum Institute report to be released late Tuesday would show crude stocks buildups also contributed to the market’s already overwhelmingly bearish tone. The figures, released after the close of trading, showed an 8-million barrel increase in crude oil stocks at 371 million barrels. Crude stocks are a bearish 45 million barrels above their levels at this time last year.

“We can reasonably expect a bounce to recover from this blood bath, but beyond that the market looks like it’s going to remain weak because production is outpacing demand for the time being and storage space is so tight,” United Energy Inc. analyst Kevin Breslin said.

Heavy production by the Organization of Petroleum Exporting Countries is also hitting world oil prices hard, according to traders who described the market as fundamentally very weak.

North Sea Brent Blend, the most widely traded international crude, fell 65 cents, following a 75-cent drop on Monday, to $15.95 per barrel Tuesday.

Dubai, the key Middle East marker grade, was at $14.05 for May cargoes, down 50 cents from Monday and $1 below last Friday.

“A lot depends on OPEC deciding at some stage to curtail supply, which would take time, but which would calm the market,” one trader said.

“On the other hand a lot depends on consumption of oil products--gasoline, heating oil,” the trader added, summing up the sentiment that has led to such precipitous falls in prices worldwide.