ABC Online; A snap strike at Shell oil terminals in Nigeria has triggered the latest upward spike in world oil prices producing sizeable falls in stock prices on Wall Street.
On the New York Mercantile Exchange, the benchmark crude oil contract soared to $US53 a barrel early on in the session.
That is the highest it has been in the 21 years of oil trade on NYMEX.
As well as the industrial disruption in Nigeria, the market continues to fret about low supplies of heating oil as the northern winter approaches.
Production problems persist in the Gulf of Mexico after the string of recent hurricanes.
At about 7:30am AEST, West Texas crude was at $US52.56 a barrel.
Equity markets tend to worry about the impact of higher energy costs on the profit margins of companies and the spending patterns of consumers.
Meanwhile, Federal Reserve governor Ben Bernanke has told the Japan Society in New York that if a slowing of the US economy justified a pause in interest rate rises, that would certainly be the response.
On Wall Street, investors have also focused on the pharmaceutical sector after a report that a key drug produced by Pfizer might have problems similar to those of the arthritis drug, Vioxx, which has been withdrawn by Merck after links to heart attacks and strokes.
On the New York Stock Exchange, the Dow Jones industrial average has slumped 115 points to10,125.
That is a slide of 1.1 per cent.
The high-tech Nasdaq market is down a similar percentage.
The Nasdaq composite index has lost 22.5 points to 1,949.
The British share market is modestly weaker.
London's FT100 index has closed 8 points lower at 4,699.
Yesterday, the Australian market just managed to close in positive territory after some early weakness.
BHP Billiton shares rose 24 cents to $14.94, while Rio Tinto was up 70 cents to $39.57.
But the banks and Telstra were weaker.
By the close, the All Ordinaries index had edged ahead 1.5 points to 3,711.
Looking at trade overnight on the Sydney Futures Exchange.
The Share Price Index 200 contract has closed down 13 points at 3,696.
The 10-year bond contract is down half a point at 94.46 with the implied yield rising to 5.54 per cent.
The Australian dollar has made gains overnight.
At around 7:30am AEST, it was being quoted at about 72.82 US cents -up almost 0.4 cents on yesterday's local close.
On the cross-rates, it was at 0.5928 euros, 80.83 Japanese yen, 40.85 pence sterling 1.077 New Zealand dollars.
