New York ? The price of oil plunged 9 percent Tuesday, falling to its lowest level in more than two months as traders bet that the impending United States invasion of Iraq will go smoothly and that global stockpiles of crude are sufficient to offset any supply disruptions.

The April futures contract fell $3.26 to $31.67 a barrel on the New York Mercantile Exchange, the lowest close since Jan. 8.

However, with U.S. supplies low and uncertainty in the Middle East high, traders said petroleum prices likely would remain volatile in the short term.

The most recent Energy Department data showed commercial stockpiles of crude at 269.8 million barrels, 18 percent below year ago levels. Supplies have dwindled as a result of high demand for heating oil in the Northeast and fewer imports from Venezuela, whose oil industry was crippled for months by a nationwide strike.