* FTSEurofirst down 1.8 pct
* Brent sinks towards crisis lows
* Resources and auto stocks also fall (Adds closing prices, quote)
By Alistair Smout and Danilo Masoni
LONDON/MILAN, Dec 14 (Reuters) - European shares fell to a 2 1/2-month low on Monday as Brent crude oil prices dropped to their lowest since 2008.
Brent sank below $37 a barrel for the first time since December 2008, amid expectations that a glut in oil supplies would grow in the months to come.
Energy shares fell 2.6 percent. Seadrill, Tullow Oil and OMV were down 3 to 5 percent.
But the declines were not limited to oil and gas stocks. Every STOXX Europe 600 sector fell at least 1 percent.
"It's a little bit surprising that a lower oil price is taken as such a negative by the stock market," said Dennis Jose, European equity strategist at Barclays.
"But if lower oil prices cause a higher probability of defaults within energy companies, that could feed through to other sectors and lead to instability."
Basic resources stocks fell 3.4 percent, giving up early gains. Although November's factory output rose to a five-month high in China, the world's biggest metals consumer, cheaper oil and a rising dollar saw copper fall.
The China data had helped European stocks open higher, but the pan-European FTSEurofirst 300 gave up its gains to close 1.8 percent lower at 1,371.76 points.
"In a normal environment, when we see China data as good as what we had over the weekend, that would set the market alight," said Zeg Choudhry, managing director of LONTRAD. "The pressure on crude is the noose around our neck at the moment."
Exporters also fell. Auto firms dropped 2.6 percent after opening higher. Support from a weaker euro had largely dissipated by midday.
Some traders cited caution before a U.S. Federal Reserve decision due on Wednesday. The central bank is widely expected to raise interest rates for the first time since 2006.
The pan-European FTSEurofirst 300 fell to its lowest level since early October. The volatility index VSTOXX, a crude measure of investor caution, rose to its highest since October.
South Africa-exposed Old Mutual rose 1.3 percent after the rand advanced following the appointment of a new finance minister in the country.
Veolia rose 3 percent after the French water and waste group said it would start paying higher dividends again as it expects core earnings to grow by around 5 percent in 2016-18.
Telecom Italia ordinary shares fell 1 percent. A plan to convert saving shares into ordinary stock was seen at risk after top investor Vivendi said it would abstain from voting in favour of the move. Telecom Italia saving shares were down nearly 10.7 percent.
Today's European research round-up RCH/EUROPE (Additional reporting by Lionel Laurent; Editing by Larry King)