* Brent rallies on fears of global supply disruption
* Treasury yields fall as soaring oil adds to global growth fears
* Stocks slip, safe-haven gold rallies (Updates to U.S. afternoon; adds commentary)
By Saqib Iqbal Ahmed
NEW YORK, Sept 16 (Reuters) - Oil prices jumped on Monday after attacks on crude facilities in Saudi Arabia sliced the kingdom's production in half and sparked worries over the impact of an oil shock on economic growth, halting a positive run in world stock markets as investors reached for less-risky assets.
Increased demand for safe-haven U.S. debt pushed Treasury yields lower and the price of gold rallied nearly 1%.
The attack on Saudi Arabia shut down 5% of global crude output. U.S. officials blamed Iran and President Donald Trump said Washington was "locked and loaded" to retaliate.
Oil prices surged nearly 20% at one point on Monday, with Brent crude posting its biggest intraday gain since the 1990-1991 Gulf crisis, before paring gains.
Trump approved the use of U.S. emergency oil reserves to ensure stable supply, helping steady prices some.
"The attack on Saudi Arabian production facilities exposed their vulnerabilities, and as a result, the oil market is now pricing in additional geopolitical and security risk," said Andy Lipow, president of Lipow Oil Associates in Houston.
U.S. crude rose 14.26% to $62.67 per barrel and Brent was last at $68.71, up 14.1% on the day.
Saudi Arabia officials were discussing delaying Aramco's initial public offering, the Wall Street Journal reported on Monday, citing people familiar with the matter.
The upheaval in the oil market, coupled with poor economic data from China, served to sour investors' appetite for risky assets.
The MSCI world equity index, which tracks shares in 47 countries, snapped a five-day winning streak to trade down 0.41%.
Wall Street slipped as the jump in the price of oil presented yet another headwind for a global economy that is already buffeted by deteriorating manufacturing activity and elevated trade tensions, analysts said.
"The oil spike - higher prices globally - could slow world spending on items other than oil and that's the main concern," said Rick Meckler, partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Higher oil prices boosted beaten-down energy stocks, with S&P 500 energy, one of the worst performing sectors so far this year, rising 3.47%.
Monday's rapid spike in crude prices came at a time when central banks in the United States, Europe and Asia are easing monetary policy to fight a slowdown in the global economy amid a drawn-out trade war between Washington and Beijing.
The U.S. Federal Reserve is due to hold its next policy meeting on Wednesday, at which it is widely expected to ease interest rates and signal its future policy path.
In mid-afternoon trading, the Dow Jones Industrial Average fell 132.3 points, or 0.49%, to 27,087.22, the S&P 500 lost 10.31 points, or 0.34%, to 2,997.08 and the Nasdaq Composite dropped 24.54 points, or 0.3%, to 8,152.18.
The pan-European STOXX 600 index finished down 0.58%.
U.S. Treasury yields slipped, with benchmark 10-year notes up 18/32 in price to yield 1.8432%.
In FX markets, the dollar rose against a basket of currencies after Trump's authorization of the use of an emergency crude stockpile helped temper the surge in oil prices.
The dollar index was up 0.39% at 98.638.
Gold rose after the attack on oil facilities in Saudi Arabia inflamed worries over the stability of the Middle East, boosting demand for assets seen as a haven from risk. Spot gold was up 0.82% at $1,500.7111 per ounce.
Reporting by Saqib Iqbal Ahmed; Additional reporting by Karen Brettell and Laila Kearney in New York, Koustav Samanta in Singapore, Sabina Zawadzki and Dmitry Zhdannikov in London, Medha Singh and Ambar Warrick in Bengaluru; Editing by Alistair Bell and Dan Grebler