NEW YORK (Bloomberg) - Oil plunged, re-entering bear-market territory, as a surprise increase in American fuel stockpiles fueled worries about a growing glut, feeding into an increasingly dismal economic view.

Futures in New York fell as much as 4.7% on Wednesday to the lowest in almost two months after a surprise increase in U.S. inventories. Crude was also swept up in a global meltdown of stock and commodity markets after rate cuts in New Zealand, India and Thailand escalated recessions fears and spurred a flight to U.S. Treasuries and other safe havens.

In the U.S., domestic crude inventories expanded by 2.39 MMbbl last week, snapping a seven-week string of declines, according to data from the Energy Information Administration. Gasoline stockpiles also expanded by the most for this time of year since 2001, an alarming trend during what is usually the peak demand season.

“The bearish and deteriorating global macro situation seems to have the upper hand, pushing oil lower and lower,” said Bjarne Schieldrop, Oslo-based chief commodities analyst at SEB AB.

London-traded Brent crude also deepened its descent into bear territory, dipping more than 4% as worries build about the escalating U.S.-China trade war. The EIA earlier Tuesday lowered its estimates for growth in global oil demand this year to 1 MMbpd.

Brent crude has fallen about 12% this month as the deteriorating relationship between the world’s two largest economies damped the global economic outlook, eclipsing the threat of supply disruptions in the Persian Gulf. The ratcheting up of trade tensions in the past week spurred speculation that China will start avoiding American oil.

West Texas Intermediate oil for September delivery declined $2.23 to $51.40/bbl at 11:03 a.m. on the New York Mercantile Exchange after earlier reaching $51.10.

Brent for October settlement fell $2.12 to $56.82 on the London-based ICE Futures Europe Exchange. The contract sold for a premium of $5.43 to WTI for the same month.