* U.S. crude oil at 13-year lows
* Global equities set for worst month since October 2008
* MSCI World index confirms bear market on intraday basis (Adds open of U.S. markets, byline, dateline; previous LONDON)
By Chuck Mikolajczak
NEW YORK, Jan 20 (Reuters) - Global equity markets dropped to their lowest levels since 2013 on Wednesday to put them on pace for one of their worst monthly performances on record, as oil once again tumbled to 13-year lows.
The MSCI World equity index .MIWD00000PUS slumped 2.6 percent to its lowest level since July 2013. The index has already dropped 11 percent in January, which if sustained would be the worst monthly loss since October 2008, the month after Lehman Brothers went bankrupt.
The declines left the index down 20.8 percent from its high on May 22, confirming a bear market on an intraday basis, generally defined as a drop of more than 20 percent.
Wall Street tumbled more than 2 percent, with each of the 10 major S&P sectors down more than 1 percent, led lower by a drop of more than 4 percent in the energy .SPNY sector. Nearly 200 stocks in the benchmark S&P were down 20 percent or more from their 52-week high. Dow Jones industrial average .DJI fell 358.34 points, or 2.24 percent, to 15,657.68, the S&P 500 .SPX lost 43.99 points, or 2.34 percent, to 1,837.34 and the Nasdaq Composite .IXIC dropped 110.68 points, or 2.47 percent, to 4,366.28.
There have been steeper monthly drops only four times in the MSCI World index's 28-year history, two of which occurred during the financial crisis in 2008.
"The focus remains on oil and the impact of low oil prices, which points to slowing growth and possibly, even stagnant to negative growth here in the United States," said Peter Cardillo, chief market economist at First Standard Financial in New York.
U.S. crude wallowed at its lowest since 2003 after the International Energy Agency warned the market could "drown in oversupply". U.S. futures CLc1 plunged 5.2 percent to $26.97 while Brent crude LCOc1 lost 3.8 percent, to $27.67. shares touched their lowest level since October 2014, with the FTSEurofirst 300 .FTEU3 down 3.4 percent and set for its biggest single-session loss since the China-induced selloff in August.
Germany's DAX .GDAXI , France's CAC .FCHI and Britain's FTSE .FTSE were all down more than 3 percent and also heading for their biggest falls of the year so far. key commodity, copper, slipped 1.1 percent, driving falls of 4.2 and 3.9 percent respectively in Europe's basic resources .SXPP and energy .SXEP sectors.
Oil shares in Europe are down more than 14 percent already this year and at their lowest levels since 2003. That has been a major weight on the FTSEurofirst 300, which is down nearly 12 percent in 2016 and more than 23 percent from its high in April.
The Nikkei share average .N225 shed 3.7 percent to its lowest close since Oct. 24, 2014. safe-haven yen JPY= climbed as risk appetite soured, dragging the dollar to a one-year low, as investors trimmed the chances of more tightening by the Federal Reserve. for U.S. bonds, another asset sought in times of uncertainty, was high, with yields on benchmark 10-year Treasury notes US10YT=RR down to 1.9512 percent, the lowest since August, up 25/32 in price.
While the dollar fell against the yen, it was strong against emerging market currencies, compounding the misery for many countries already suffering from low oil prices.