Oil’s tumble to a six-year low touched off a rout in equity markets, as energy-related shares tumbled with currencies of commodity-producing nations. The dollar gained and gold fell on rising prospects for higher U.S. interest rates.

American crude extended losses past $38 a barrel to the lowest level since 2009 as OPEC abandoned its strategy of limiting production. The Standard & Poor’s 500 Index dropped as energy shares sank the most since Aug. 24, while Canada’s resource-heavy benchmark plunged the most in two months. Colombia’s peso weakened to a record, while Norway’s krone and Russia’s ruble slid. The greenback rallied and gold fell as investors shifted their attention to the Dec. 16 Federal Reserve policy decision.

“Weak oil is the story today,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP. “The lack of economic numbers today is compounding the effect of energy losses. The Fed rate hike is imminent, and people are trying to square up heading into year-end.”

David Fuller's view

I think we know both sides of the story, regarding the collapse in oil prices. 

This is a huge boon for importers of crude oil (Brent & WTI), businesses in terms of their energy costs and consumers who can barely believe the drop in US gasoline prices that has occurred since mid-2014.  

The known downside is a dramatic slump in demand from oil producers which has hurt exports from all developed countries and a number of emerging markets.  The oil price slump has also increased political and social instability among oil producers, while also fanning regional wars in the Middle East and North Africa. 

The emergence of Daesh is the most alarming consequence of Middle Eastern turmoil.  Death cults which appeal to a range of susceptible youths, from the disenchanted, unemployed, emotionally vulnerable and youthful criminals in other countries have far reaching tentacles, as we are seeing. 

Daesh is certainly a disturbing problem.  However, death cults do not have long-term appeal and they cannot create nations.  Now that the United Nations Security Council has unanimously called on UN members to fight Daesh (Isis or Isil), it’s threat will inevitably decline.