Oil tumbles again

United States stocks slumped Wednesday as the price of oil suffered its worst one-day drop since September, and the Standard & Poor's 500 index fell to its lowest level in almost two years.

US crude dropped US$1.91, or 6.7 per cent, to US$26.55 a barrel in New York. That was the biggest one-day plunge for US oil since September 1. US crude is down 28 per cent in 2016 and is trading at its lowest level since May 2003.

Investors are worried that low oil prices mean there is not that much demand for fuel. That would be a sign that growth in the global economy is slowing down. Stocks in the US started sharply lower following widespread selling overseas, and looked like they were headed for huge losses. At one point the Dow Jones industrial average fell as much as 565 points.

After a late recovery, the Dow closed down 249.28 points, or 1.6 per cent, to 15,766.74. The S&P 500 index fell 22 points, or 1.2 per cent, to 1,859.33. That is its lowest closing price since April 2014.

The Nasdaq composite, which briefly turned positive in the afternoon, lost 5.26 points, or 0.1 per cent, to 4,471.69. The Dow is the lowest it's been since August, and the Nasdaq is at its lowest since October 2014.