While you were sleeping: Oil sends stocks lower

Equities on Wall Street and in Europe fell with oil prices after OPEC downgraded its forecast for 2015 global demand to the lowest level in 12 years, while Saudi Arabia's oil minister maintained the nation's resistance to cutting output.

"Why should we cut production? Why?" Saudi Oil Minister Ali al-Naimi told journalists on the sidelines of an annual UN climate change conference in Lima, Peru, Reuters reported.

Separately, the Organisation of Petroleum Exporting Countries downgraded its prediction for global demand next year, cutting it by about 280,000 barrels a day to 28.92 million a day from its previous estimate.

Oil slumped to fresh five-year lows. Brent crude sank as much as 4.9 percent to US$63.56 a barrel on the ICE Futures Europe Exchange in London.

In afternoon trading in New York, the Dow Jones Industrial Average dropped 0.81 percent, the Standard & Poor's 500 Index slid 0.78 percent, while the Nasdaq Composite Index fell 0.65 percent.

Slides in shares of Exxon Mobil and those of Chevron, down 2.8 percent each, led the Dow lower.

"Oil seems to be the one theme that has more control over the direction of the market and the degree that volatility emerges than any other theme right now," Peter Kenny, chief market strategist at Clearpool Group in New York, told Reuters.

On a positive note, the Commerce Department reported better-than-expected services data, which could lead to an upward revision in gross domestic product growth for the third quarter.

Europe's Stoxx 600 Index ended the day with a 0.3 percent decline from the previous close. The UK's FTSE 100 Index fell 0.5 percent, while France's CAC 40 Index retreated 0.8 percent. Germany's DAX Index managed to eke out a 0.06 percent gain.

"With oil prices in free fall, we've come to a point where it's very difficult to be a buyer," said Steven Santos, a broker at X-Trade Brokers DM in Lisbon, told Bloomberg News. "When you add this to the political turmoil coming from Greece, it's a dangerous combination for the markets. Looks like we might not get that Santa rally after all."

Shares in Airbus dropped 10 per cent after the aircraft maker's chief said he didn't expect a return to profit growth until 2017. Separately, Qatar Airways deferred the delivery of the first A350 wide-body aircraft from Airbus.

(BusinessDesk)