By Herbert Lash
NEW YORK (Reuters) - Oil prices dove below $30 a barrel on Friday, dragging major equity indices around the world sharply lower, as fears of a global slowdown amid a crude supply glut roiled markets and unsettled investors who snapped up gold and other safe-haven assets.
Major stock indices in Europe and on Wall Street tumbled more than 2 percent while crude prices slid on expectations Iran will increase oil exports once international sanctions are lifted, possibly within days.
Yields on the benchmark 10-year U.S. Treasury note were poised to fall below 2 percent and gold rose as retreating oil prices and equity markets underpinned demand for assets perceived as safer.
The December futures contract on the federal funds rate surged to its highest since October, implying the Federal Reserve will raise rates only one more time this year.
The Australian, New Zealand and Canadian dollars all sank against the U.S. dollar on the back of another slide in Chinese stock markets and the slide in oil. But the dollar fell against both the euro and yen.
World stock markets were set for a third week of losses. European shares fell to their lowest since December 2014, hit by losses in commodity-related stocks after BHP Billiton (L:BLT) announced a $7.2 billion writedown on its U.S. shale assets.
BHP shed 6.9 percent, the second-biggest decliner on the pan-European FTSEurofirst 300 index, which fell 3 percent. MSCI's all-country world stock index fell 2 percent.
"Oil is deeply oversold. The stock market is deeply oversold. The inability for the market to rally from deeply oversold conditions clearly tells you how weak the market is," said Adam Sarhan, chief executive of Sarhan Capital in New York.
The Dow Jones industrial average fell 380.56 points, or 2.32 percent, to 15,998.49. The S&P 500 slid 43.44 points, or 2.26 percent, to 1,878.4 and the Nasdaq Composite lost 127.38 points, or 2.76 percent, to 4,487.63.
U.S. crude futures were down more than 5 percent at $29.59 a barrel, after posting their first significant gains for 2016 in the previous session. Earlier they hit $29.28, the lowest since November 2003.
The March Brent contract traded 4 percent lower at $29.62, after hitting a 12-year low of $29.30 earlier in the day.