The share market has closed near its lowest level in more than two years thanks to a slump in the price of oil and relentless bad economic news out of China.

The All Ordinaries Index finished at 4,896, down 58 points.

The ASX-200 dropped slightly more, to 4,841.

The big banks were all in the red — ANZ was the worst performer due to its exposure to Asia. It lost more than a dollar, to $23.50.

Energy stocks were also hit hard due to the drop in the oil price.

Origin Energy has lost 36 cents to $3.46, with Santos shedding 20 cents to $2.48 and Woodside losing 72 cents to $25.39.

BHP shares are at their lowest in more than 10 years, down 49 cents to $14.24.

The company's latest quarterly production report, out today, showed its output was dented by the catastrophic dam collapse in Brazil last year.

It has also been hurt by falling commodity prices.

Chief executive Andrew McKenzie said he was determined to protect BHP's balance sheet, prompting questions about its shareholder dividends.

In commodities, West Texas Intermediate Crude is lower, at $US28.42 a barrel.

Iron ore is higher, just above $US42 a tonne, while gold is also higher at $US1090 an ounce.

The Australian dollar is buying 68.7 US cents.