Australian dollar, local share market fall due to global oil market volatility

The local share market and the Australian dollar fell sharply on Friday after getting caught in the crossfire of a global battle for dominance of the oil market.

Global oil prices dropped after an overnight meeting of the Organisation of Petroleum Exporting Countries (OEPC) in Vienna.

OPEC member states, led by Saudi Arabia, announced they would not be cutting production, widely seen as a tactic to force out higher cost producers, particularly in the United States.

But the tactic also hit home in Australia, including a slump of more than 6.5 per cent for energy sector stocks and a fall of more than 1 cent for the local currency against the greenback.

The All Ordinaries index closed down 83 points or 1.6 per cent at 5,298.

The ASX-200 lost 88 points to 5,313.

Santos led the energy sector's falls, crashing 13 per cent.

Woodside fell 7 per cent and Oil Search closed 5.9 per cent lower.

The mining sector was also heavily sold, including firms also exposed to the global oil trade.

BHP Billiton fell 3.4 per cent. However, Rio Tinto gained 1.9 per cent after confirming plans to expand its Australian iron ore operations.

The banks also suffered, with Westpac falling 2.1 per cent, ANZ 1.6 per cent and NAB 1 per cent.

There was a small list of stocks to benefit from the falling oil price. Qantas stocks climbed nearly 7 per cent, also aided by some positive passenger numbers.

The Australian dollar is currently trading at just under 85 US cents. It is also worth around 68.3 euro cents, 54.1 British pence, 100.4 Japanese yen and 108.4 New Zealand cents.

West Texas intermediate crude oil is not trading because of the Thanksgiving holiday in the United States.

But Tapis crude oil in Singapore fell sharply from Thursday to $US73.74 a barrel.

Brent crude oil, another key benchmark, fell more than 6 per cent in the wake of the OPEC meeting, and is now at $US71.80 cents a barrel.

Spot gold is trading around $US1185.00 an ounce.