China equities collapse sparks global markets sell-off

A trader works on the floor of the New York Stock Exchange August 24, 2015. Wall Street opened sharply lower on Monday with the Dow Jones industrial average losing more than a 1,000 points following a more-than 8 percent drop in Chinese shares and a selloff in oil and other commodities. REUTERS/Brendan McDermid

Oil prices fell more than 6 percent to fresh 6-1/2-year lows on Monday as markets worried about a China-led global economic slowdown that would drastically hit oil consumption at a time of plentiful supply.

Chinese stock markets suffered their biggest one-day drop since the financial crisis, stirring huge sell-offs in global equities and commodities, with more than 400 billion euros ($465 billion) wiped off Europe's FTSEurofirst 300 share index.

"Today's falls are not about oil market fundamentals. It's all about China," Carsten Fritsch, senior oil analyst at Commerzbank in Frankfurt, told the Reuters Global Oil Forum. "The fear is of a hard landing and that things get out of the control of the Chinese authorities."

Brent oil hit an intraday low of $42.51 a barrel, down 6.5 percent, or $2.95, from Friday's close. It was down $2.40 at $43.06 a barrel as of 1348 GMT.

US light crude was down $1.93, or 4.8 percent, at $38.52 a barrel, after falling as low as $37.75, down 6.7 percent on the previous close and its weakest since February 2009. Steep losses last week led to the contract's longest weekly losing streak since 1986.

US crude is now more than 17 percent below its opening price at the start of the month and Brent is down more than 16 percent.