Oil fell $2.01 to $88.56 per barrel Monday in electronic trading on the New York Mercantile Exchange - - pushed lower by a major sell-off in stock markets in Europe and Asia, amid increased concern that a weak U.S. economy will prompt a global economic slowdown.

Oil is down more than 11% since briefly trading above $100 at $100.09 on January 3, 2008. Oil hit an all-time high, in inflation-adjusted terms, of $102.80 per barrel in April 1980.

Oil fell after global equities markets sold-off amid both increased concerns that the world's other major economic regions will be hurt by the U.S. economic slowdown and talk of additional write-downs/asset losses stemming from the U.S. subprime mortgage sector.

The Finanical Times reported that shares in China plunged 5.1%, Hong Kong shares sank 4.5%. In Europe, London's FTSE dropped 5.5% to 5,578.20, the German Dax plunged 7.2 to 6,790.19, and France's CAC-40 sank 6.8% to 4,744.45.

As bad news mounts and fears grow about the impending recession, stock markets dropped around the world in Monday trading. Adding to the woes, analysts expect that the Bank of China may have to write off at least 25% of its $8 billion [subscription required] mortgage securities holdings in the U.S. Prior to these reports, the bank had only admitted to the need for a $322 million provision for losses, according to today's Wall Street Journal.

Europe's Dow Jones Stoxx 600 Index took its steepest fall since its Sept. 11, 2001 tumble, dropping 4.2%. Since it reached its 6 1/2 year high in June, the index has dropped 22%. A drop of more than 20% puts this market officially into bear territory.

Other key losers today include:

• France's CAC 40 lost 5.1%
  
• UK's FTSE 100 dropped 4%
• Germany's DAX went down 5.9%
• MSCI Asia Pacific Index lost 3.7% and the MCSI Emerging Markets Index fell 5.1%
• Hong Kong's Hang Seng Index gave up 5.5%
• Japan's Nikkei 225 Stock Average lost 5.1%

With this type of global bloodbath, expect U.S. stocks to tank when they reopen tomorrow. They are closed today for the holiday. Investors are seeking safe havens in bonds and currencies.

Lita Epstein has written more than 20 books including "Trading for Dummies."