NEW YORK — The price of U.S. oil closed under $40 per barrel Monday for the first time since the days of the global economic crisis on fears of a slowdown in the world economy.
Already trading at six-year lows on a prolonged slump, U.S. crude fell $2.21 to finish at $38.24 per barrel. Oil hadn’t closed below $40 since February 2009, although it briefly traded below that level Friday. Monday’s closing price was the lowest since Feb. 18, 2009. Brent crude, a benchmark for international oils used by many U.S. refineries, slipped $2.77 to $42.69 on Monday and is at its lowest levels since March 2009.
Signs are mounting that growth in China, the No. 2 economy in the world, is slowing. That is making investors worry more about the health of the world economy, and those fears led to a sell-off in stocks Friday and again Monday, when China’s main stock market took its biggest dive in eight years.
The Dow Jones industrial average spent the day far in the red, losing nearly 600 points.
The Shanghai index suffered its biggest percentage decline in 8½ years. The market has lost all of its gains for 2015, though it’s still more than 40 percent above its level a year ago.
The U.S. has ramped up oil production to historic levels the past few years while OPEC countries continued to churn out crude. Supplies have built up and growth in the world economy has been slow, with China’s economy losing steam and Japan’s shrinking. That resulted in a supply glut that has punished oil prices: the price of U.S. crude has fallen about 60 percent over the last year. U.S. crude averaged more than $90 per barrel from 2011 through 2014. Its price has fallen for eight consecutive weeks, the longest slump in nearly 30 years.