Oil falls below US$38
United States stocks continued falling into afternoon trading Monday as investors dumped energy companies.
Benchmark US crude is trading at its lowest level in nearly seven years following a decision by OPEC last week not to cut oil production. Airline stocks rose on the prospect of lower fuel costs.
The Dow Jones industrial average gave up 123 points, or 0.7 per cent, to 17,724 as of 2:08 p.m. Eastern time. The Standard & Poor's 500 index fell 16 points, or 0.8 per cent, to 2,075. The Nasdaq composite dropped 38 points, or 0.7 per cent, to 5,104.
Oil drillers and other energy companies fell sharply as benchmark US crude continued its one-and-a-half year tumble.
US crude fell $2.17, or 5.4 per cent, to US$37.80 a barrel on the New York Mercantile Exchange at mid-afternoon, its lowest price since February 2009. Natural gas prices also fell.
"No one in the energy patch is willing to support the price (of oil) and, if they aren't willing, the price will keep dropping," said Mizuho Securities chief economist Steven Ricchiuto. "The whole world is facing excess supply as the global economy slows."