Dow Jones falls 592 points as oil prices collapse, ASX to drop

Australian shares are set to drop sharply in the wake of US oil prices falling below zero for the first time in history, underscoring the chaos the COVID-19 pandemic has unleashed on the global economy.

ASX futures were down 48 points, or 0.9 per cent, by 7:10am AEST.

The Australian dollar had slipped to 63.37 US cents.

Wall Street’s benchmark index, the S&P 500, has fallen 1.8 per cent to 2,823 points — and is providing a negative lead for the local share market.

The industrial-skewed Dow Jones closed 592 points (or 2.4 per cent lower) at 23,650, while the tech-heavy Nasdaq index shed 1 per cent to 8,561.

US markets were dragged down, mainly by a crash in oil prices.

The May futures contract for West Texas Crude, which expires on Tuesday, plunged by more than 300 per cent to -$US37.63 a barrel.

It means producers are paying traders to take the oil off their hands since the United States is quickly running out of space for it.

Meanwhile, the international oil benchmark, Brent crude futures, dropped 7.7 per cent to $US25.92 a barrel.

Spot gold jumped to $US1,712.40 an ounce.

Virgin Australia is set to go into voluntary administration this week, unable to pay its enormous debts amid widespread travel bans.

Accounting firm Deloitte is expected to be appointed the administrator.

More to come.