Investing.com - Plunging oil prices sent energy stocks falling on Wednesday, bringing broader equities indices down with them, especially on news global oil cartel OPEC expects demand to fall next year, a sign the global economy may be cooling the pace of its recovery.
At the close of U.S. trading, the Dow 30 fell 1.51%, the S&P 500 index fell 1.64%, while the Nasdaq Composite index fell 1.73%.
The S&P 500 VIX index, which measures the outlook for market volatility, was up 24.45% at 18.53.
The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories increased by 1.5 million barrels in the week ended Dec. 5, confounding expectations for a decline of 2.5 million barrels, which stoked demand concerns.
Total U.S. crude oil inventories stood at 380.8 million barrels as of last week.
The report also showed that total motor gasoline inventories increased by 8.2 million barrels, above expectations for a gain of 2.6 million, while distillate stockpiles rose by 5.6 million barrels.
Elsewhere, the Organization of the Petroleum Exporting Countries' monthly report released earlier showed that its collective crude output fell by 390,100 barrels a day in November to a total of 30.05 million barrels.
According to the agency, the decline was led by Libya, which cut production by approximately 248,300 barrels per day to 638,000.
Saudi Arabia's output fell by 60,100 barrels a day to 9.59 million barrels a day, while production in Kuwait dropped by 59,400 barrels a day to 2.69 million barrels a day
OPEC also forecast that demand for the group's oil will drop to 28.9 million barrels a day next year, down from 29.4 million barrels a day in 2014, which exacerbated Wednesday's losses on stock markets by stoking fears global recovery faces headwinds.
London-traded Brent prices have fallen nearly 44% since June, when it climbed near $116, while WTI futures are down almost 43% from a recent peak of $107.50 in June.
OPEC decided to maintain its output target at 30 million barrels a day last month, disappointing hopes the oil cartel would lower production to support the market, as a surplus develops amid the shale boom in the U.S., which is pumping at the fastest pace in more than 30 years.
Iraq’s state-run oil company lowered official selling prices for its crude in January, following a similar move from Saudi Arabia, indicating that OPEC exporters are stepping up a battle for market share with cheaper U.S. shale oil.
Leading Dow Jones Industrial Average performers included Nike Inc (NYSE:NKE), up 0.65%, Merck & Company Inc (NYSE:MRK), which was down 0.05%, and Pfizer Inc (NYSE:PFE), down 0.28%.
The Dow Jones Industrial Average's worst performers included Boeing Company (NYSE:BA), down 3.87%, Exxon Mobil Corporation (NYSE:XOM), down 2.97%, and JPMorgan Chase & Co (NYSE:JPM), down 2.83%.
European indices, meanwhile, ended the day largely lower.
After the close of European trade, the Euro Stoxx 50 fell 0.37%, France's CAC 40 fell 0.84%, while Germany's DAX 30 rose 0.06%. Meanwhile, in the U.K. the FTSE 100 fell 0.45%.
On Thursday, the U.S. is to release data on retail sales, the government measure of consumer spending, as well as the weekly report on jobless claims.