TORONTO (Reuters) - The Toronto Stock Exchange's main index shed nearly two percent yesterday, dragged down by skidding resource issues amid investor concerns over the long-term prospects for oil demand.

A see-saw session for crude prices provided scant support for the benchmark, as oil finally settled up 26 cents at $137.00 a barrel amid worries over supply disruptions in Nigeria and increasing tensions between Israel and Iran.

On Bay Street, the energy sector tumbled 3.2 percent, with Canadian Natural Resources falling C$3.60, or 3.5 percent, to C$100.10 and Suncor Energy down C$3.67, or 5.7 percent, at C$61.31.

"I think the anticipation is that there will be some sort of drop in demand," said Adrian Mastracci, portfolio manager and president of KCM Wealth Management Inc. in Vancouver.

Mr. Mastracci also noted that there is still a disconnect between energy stocks and the price of oil, as the sector's shares have not risen as quickly, or as high as the commodity.

The S&P/TSX composite index closed down 282.22 points, or 1.92 percent, at 14,409.6 with all 10 of its main sectors lower.

The materials sector was down 2.1 percent. Potash Corp of Saskatchewan was the biggest net loser, down C$9.90, or 4.1 percent, at C$229.99. Fellow fertiliser producer Agrium fell C$5.48, or 4.8 percent, to C$108.60.

The consumer discretionary and staples groups gave up 1.1 percent and 1.4 percent respectively, amid persistent concerns over what impact the domino effect of high energy prices will have on consumers' appetite for spending.

Crystallex International was the biggest percentage gainer on the TSX, spiking 66.2 percent after it said Venezuela was reconsidering the denial of the mining permit for its Las Cristinas gold deposit. Crystallex stock closed up 43 Canadian cents at C$1.08.