THE Dow is set for a 1,000 point plunge as oil prices have seen their biggest drop since 1991.
Demand for oil has plummeted as coronavirus panic grows and continues to inflict havoc on global markets.
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The sharp 30 percent drop in oil prices is the biggest since the first Gulf War, triggered by a trade war between Saudi Arabia and Russia.
Talks between the two countries in Vienna collapsed on Friday, with Saudi Crown Prince Mohammed Bin Salman announcing huge price cuts to Saudi crude
Saudi Arabia also plans to increase production above the 10 million barrel per day mark.
This has triggered a price war aimed at Russia, with brent crude dropping to just $31.02 a barrel at its lowest.
Goldman Sachs say that prices could even drop into the 20s.
According to Bloomberg, this has prompted investors to opt for safer government bonds, causing the 1-year Treasury yield to break below 0.5 percent for the first time.
Meanwhile, the deadly coronavirus continues to disrupt the Chinese economy which is the largest importer of oil globally.
The Organization of Petroleum Exporting Countries alliance (OPEC), which aims to manage global oil supply, had recommended production cuts of 1.5 million barrels per day as the virus continues to spread.
In Europe, the FTSE in London hit a three-year low after a sharp drop in oil stocks, prompted by Saudi Arabia's choice to raise crude output.
Just last week, the Governor of the Bank of England Mark Carney warned that the economic shock from coronavirus could "prove large" in the UK.
It plunged 8.5% and fell below 6,000 points.
In Asia, global stock markets took a hit as the Tokyo stock market index fell 6.2 percent, Hong Kong 3.9 percent and Riyadh eight percent.
Markets in Australia also had their worst day since the financial crash of 2008.
The ASX200 tumbled 7.3 per cent to 5,760.6, losing $140 billion after falling 3 percent on Friday.
It has now fallen 19.6 per cent since February 20.
Wall Street suffered its worst two-day losing streak in two years last month as markets in France and Germany fell as much as 2 per cent amid the fallout over the worldwide outbreak.
Major firms including Apple, Microsoft, and Mastercard are now expecting revenues to be lower than forecast because of supply chain disruptions caused by the virus.
Coronaviruses are a large family of viruses that can cause infections ranging from the common cold to Severe Acute Respiratory Syndrome (Sars).
The virus attacks the respiratory system, causing pneumonia-like lung lesions.
Some of the virus types cause less serious disease, while others – like the one that caused Middle East Respiratory Syndrome (Mers) – are far more severe.
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