World stock markets are under pressure after oil prices hit fresh record highs on Friday on fears that demand will outstrip supplies.
Crude oil prices climbed close to $45 a barrel after a fire at a major US refinery added to the catalogue of disasters undermining the market.
The Dow and Nasdaq indices fell more than 1.5% each on Thursday, and Asian markets followed suit on Friday.
European markets, including the FTSE in London, also took a trip south.
Responding to news of the refinery fire, US light crude traded at $44.77 a barrel overnight on Thursday, the highest in the 21-year history of crude futures on the New York Mercantile Exchange.
And London's Brent crude reached $41.50 a barrel, a record for the contract since it started trading in 1988 on the International Petroleum Exchange.
Turbulent week
Soaring demand both from the US and China, combined with security fears in the Middle East, have been driving prices higher for months.
Thursday's fire at the refinery in Texas came on the back of news that Russia could be back-tracking on promises to lift an asset freeze on oil giant Yukos.
This was all the markets needed at the end of a turbulent week.
In Japan, the Nikkei share index fell 0.80% to a 10-week closing low of 10,972, on Friday, as runaway oil prices fuelled investor concerns about an economic slowdown in the US, Japan's main trade partner.
In Hong Kong the response was more modest, with the Hang Seng slipping 13.24 points at 12,478.68.
High oil prices are a particular threat to Asian growth because the region is highly dependent on imported crude to power its industries.
Overnight in New York, US stocks suffered one of the sharpest declines of 2004, with the blue-chip Dow Jones index tumbling 163 points to 9,963, breaching the psychological 10,000 barrier.
The technology-oriented Nasdaq index settled at its lowest level this year, down 33.43 points at 1,821.63.
Global jitters filtered through to Europe on Friday with all major markets flashing red. The Dax index in Frankfurt lost 1.44% while the Cac in Paris slid more than 1%
In London on Friday, the FTSE 100 was down, but not out, underpinned by rumours of an impending takeover bid for banking giant Barclays.
The FTSE was trading 22.9 points lower at 4,390.5 at mid-session.
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