Oil price falls to lowest level since 2009

USA production remains near record-highs, though it has backed off in recent months.

Cheap oil also translates to lower heating bills.

The Dow Jones Industrial Average closed down 117.12 points (0.66 percent) to 17,730.51. Internationally traded Brent futures were down 20 cents at $42.80 per barrel. AP’s earlier story is below. Shale production in the USA is one of the most expensive ways of extracting oil but over the past year U.S. producers have continued to reduce costs and overheads keeping production levels stable.

Germany’s DAX index dropped 1.4% and France’s CAC 40 fell 1.1%.

“As a result of the collapse in oil and gas prices today, the market is anxious that you’re going to see less capital spending, you’re losing a lot of a good-wage jobs in the oil patch, and people are worrying that we’re going to see a snowball of defaults among high-yield energy issuers”, said Scott Wren, senior global equity strategist at Wells Fargo Investment Institute in St Louis.

Oil slumped to its lowest level since the financial crisis as traders reacted to a rancorous Organisation of the Petroleum Exporting Countries meeting last week that exposed its inability to tackle a global glut. US crude (CLc1) was trading at $37.44 a barrel, down 11 cents from its last settlement.

Investors sold from the start of trading following a decision by OPEC last week not to cut production.

Office Depot plummeted 15.8 per cent and Staples 13.8 per cent after the US Federal Trade Commission challenged their US$6.3 billion merger, arguing the combination would harm the business-to-business market for office supplies and services.

“A stronger dollar and the aftershock of Friday’s OPEC meeting are weighing on the oil market”, said Tamas Varga, oil analyst at brokerage PVM Oil Associates in London.

ANGLO AMERICAN: Shares in the mining firm Anglo American plunged by more than 8 percent after it said it would shed around 85,000 employees – or 63 percent of its workforce – amid a radical restructuring program meant to cope with the tumble in commodities prices.

Saudi Arabia needs oil prices of $100 a barrel to balance its budget, but as the world’s biggest exporter of crude it is gambling that the low price will knock out the threat posed by so-called unconventional supplies, such as shale.

ASIA’S DAY: China’s Shanghai Composite fell 1.9 percent and Japan’s Nikkei 225 lost 1 percent.

The Standard & Poor’s 500 index slipped 19 points, or 0.9 percent, to 2,072.

In Australia, Sydney’s S&P/ASX 200 index was down 0.56% at 5,126.70 weighed down by energy stocks. The dollar fell to 122.94 yen from 123.33 yen.