TORONTO (Bloomberg) - Canadian stocks fell the most in more than two weeks, led by energy companies and raw-materials producers, after crude oil fell below $36 a barrel for the first time since 2004 and gold prices retreated from a two-month high.

Canadian Natural Resources Ltd. and Barrick Gold Corp. each dropped more than five percent, pacing declines among the energy and mining shares that account for more than two-fifths of the main index's value. National Bank of Canada retreated to the lowest in seven years after Deutsche Bank AG and other foreign lenders threatened to scuttle a plan to reschedule payments on C$32 billion ($27 billion) of Canadian commercial paper.

The Standard & Poor's/TSX Composite Index fell 3.4 percent, to 8,425.35 in Toronto, the steepest drop since December 1. The S&P/TSX has fallen 39 percent this year, poised for its worst annual drop, as commodity prices slumped from records and worldwide credit losses approached $1 trillion.

"The big story today is oil and resources," said Paul Hand, managing director of equity trading at RBC Capital Markets in Toronto. "Materials and oil are weak, that's why the S&P/TSX is down."

Crude-oil futures dropped 9.6 percent to $36.22 a barrel in New York and touched $35.98, the lowest since June 29, 2004, on speculation that the drop in demand will outpace OPEC supply cuts as the economy weakens. Gold fell 0.9 percent from the highest price since October 10 to $860.60 an ounce as the US dollar rebounded, eroding the metal's investment appeal.

Canadian Natural, the nation's fourth-biggest energy company by market value, fell five percent to C$45.10. Suncor Energy Inc., the world's second-biggest oil-sands producer, dropped 7.2 percent to C$24.80. EnCana Corp., Canada's largest, declined 2.1 percent to C$54.50.

Husky Energy Inc. dropped the most since November 20, sliding 7.5 percent to C$29.01. The Canadian oil company controlled by Hong Kong billionaire Li Ka-shing said on December 16 that it expects to cut capital spending to C$2.6 billion next year because of the global financial crisis. Husky forecast about C$3.6 billion in spending for 2008.

Goldcorp, the second-largest bullion mining company by market value, dropped 5.5 percent to C$34.49. Barrick Gold Corp., the biggest producer of the metal, slid 5.3 percent to C$40.50. Kinross Gold Corp. slid 12 percent to C$19.68.