Trader Edward McCarthy works on the floor of the New York Stock Exchange. Photo / AP
Trader Edward McCarthy works on the floor of the New York Stock Exchange. Photo / AP
Wall Street dropped with the price of oil after reports from OPEC and the International Energy Association showed that the global glut won't abate any time soon.
Global oil demand growth is slowing at a faster pace than initially predicted, the IEA said in its latest oil market review.
"Ourforecast in this month's report suggests that this supply-demand dynamic may not change significantly in the coming months. As a result, supply will continue to outpace demand at least through the first half of next year," the IEA said, according to Reuters.
"With our more pessimistic outlook for the second half of 2016 refining activity and revisions to crude supply, the expected draws in the third quarter of 2016 are now lower, while the build in the fourth quarter of 2016 is higher," the IEA noted.
Meanwhile, OPEC now predicts that production from outside the group will rise in 2017, compared with a previous estimate for a decline, mainly due to new production from Kashagan, it said in its monthly report.
Crude fell 2.9 per cent to US$44.97 a barrel in New York.
Wall Street slid. In 2.48pm trading in New York, the Dow Jones Industrial Average dropped 1.4 per cent, while the Nasdaq Composite Index shed 1.2 per cent. In 2.32pm trading, the Standard & Poor's 500 Index slid 1.6 percent.
Declines in shares of Chevron and those of American Express, last down 2.9 per cent and 2.7 per cent respectively, led the drop in the Dow. Shares of Apple bucked the trend, trading 2.4 per cent higher recently. Shares of Exxon Mobil also moved lower.
Monsanto's board is set to meet on Tuesday to decide whether to approve a sale to Germany's Bayer for more than US$65 billion after concluding more than four months of negotiations, Reuters reported, citing people familiar with the matter.
The deal is expected to value Monsanto, the world's largest seeds firm, at more than the sweetened US$127.50 per share cash offer that the German pharmaceuticals and crop chemicals maker disclosed last week, but less than the US$130 per share that Monsanto was hoping for, the people said on Tuesday, Reuters reported.
Bayer's supervisory board is due to follow suit and meet on Wednesday to deliberate on Monsanto's response, the sources told Reuters, adding that it is still possible that the deal hits a snag with the board of either company.
Shares of Monsanto traded 0.9 per cent lower as of 2.51pm in New York, while those of Bayer closed 1.2 percent lower in Frankfurt.
In Europe, the Stoxx 600 Index finished the day with a decline of 1 per cent from the previous close. Germany's DAX index retreated 0.4 per cent, the UK's FTSE 100 Index fell 1.1 per cent, while France's CAC 40 index slid 1.2 per cent.
