Oil prices fell, energy stocks tumbled and equity markets in North America were stung Tuesday as investor confi-dence lurched lower due to eurozone fiscal problems and downbeat data on the Chinese and U.S. economies.Benchmark crude for August delivery fell $2.31, or nearly three per cent, to settle at a two-week low of $75.94 US a barrel, after reaching an interday low of $75.21.
Stocks in Canada fell in lockstep, with the S&P/TSX composite index winding up down 343.17 points, or three per cent, at 11263.83.
The loonie lost 1.78 cents to 94.76 cents US.
"This is another bout of risk aversion related to diffi culties in the eurozone and a loss of consumer confidence in the United States from the possibility that the U.S. economy might be slowing again," said Patricia Mohr, commodities economist with Scotiabank.
In Toronto, the S&P/TSX capped energy index fell 3.5 per cent.
Several Calgary companies lost about five per cent of their market capitalization, including UTS Energy, Daylight Energy, Advantage Oil and Gas, Progress Energy, Bonavista Energy and NuVista Energy.
Senior oilsands companies Suncor Energy, Canadian Oil Sands and Cenovus Energy all lost more than four per cent on the market.
Mohr predicts oil will rebound above $80 later this year, but won't set new highs for 2010, despite growth in the real consumption of oil in North America.
"We may have seen the high water mark in early April for this year," she said.
"In the first two weeks of April there was quite a surge in commodities.
Oil, for instance, got up to $87.15 a barrel in the aftermath of better employment numbers in the U.S."
Natural gas for August delivery fell 18.5 cents, or 3.9 per cent, to settle at $4.548 per million British thermal units on the New York Mercantile Exchange, the lowest closing price since June 2. The futures, down 18 per cent this year, have risen 18 per cent in the second quarter.
Expectations tropical storm Alex will only skirt the Gulf of Mexico's main energy production centres kept downward pressure on oil prices.
Prices hit a seven-week high above $79 a barrel intraday on Monday, before ending lower as the threat eased.
"It is a return to risk aversion," said Eugen Weinberg, a commodity analyst at Commerzbank in Frankfurt.
"Gold is outperforming other commodities, a sign of a move to safe havens, and base metals are down on worries over the economy."
Fears about the strength of the banking system surfaced again, with investors worried about a potential liquidity shortfall of more than $120 billion in the financial system as European banks repay $540 billion in emergency loans on Thursday to the European Central Bank.
The mood worsened after a report from the Conference Board showed U.S. consumer confidence fell steeply in June. Adding to concerns about economic growth and demand for oil, the Conference Board corrected its leading economic index for China to a 0.3 per cent gain in April rather than the 1.7 per cent rise earlier reported.
The correction prompted investors to turn against riskier assets, adding to a global sell-off. The Shanghai Composite Index fell 4.3 per cent to end at a 14-month low.
The S&P 500 tumbled to its lowest level in eight months as all but one stock ended lower. The index closed at its lowest level since Oct. 30, breaking its closing low for the year at 1050.47.
The Dow Jones industrial average lost 268.22 points, or 2.65 per cent, to 9870.30. The Standard & Poor's 500 Index fell 33.33 points, or 3.10 per cent, to 1041.24. The Nasdaq Composite Index dropped 85.47 points, or 3.85 per cent, to 2135.18.The CBOE volatility index, known as Wall Street's fear gauge, surged 22 per cent to a session high of 35.39, its highest level since early June.
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