Oil prices suffered a second year of steep losses and are expected to take at least another year to clear as the international surplus continues.
The Dow Jones was down 178.84 points or 1.03%, at 17,425.03.
The S&P 500 was down 0.95% at 2,043.86, while the tech-heavy Nasdaq composite was 1.15% lower at 5,007.41.
The oil price collapse sent global markets reeling throughout 2015.
Shares of US oil giants Chevron and Exxon Mobil were down 0.17% and 0.22% respectively for the day.
Energy stocks have taken a beating this year, with the S&P energy sector losing nearly 24% in the last twelve months.
For the year the S&P 500 was down 0.7% while the Dow Jones ended 2.2% lower.
The Nasdaq, however was a bright spot closing 5.7% higher for 2015.
Trading volumes were thin on the last day of the year.
Apple was down 1.92% weighing on the Nasdaq.
McDonald's was down 1.08% at $118 and weighed on the Dow the most.
Stocks were led lower as US jobless claims increased by 20,000 to 287,000 last week, wildly missing forecasts of 270,000.
Brent crude oil  was up 3% at $37.60 per barrel for the day but down 35% over the year. US light crude was 1.2% higher at $37.04 but down 30% for the year.

My sources include collectors all over the world, dealers, auctions, flea markets, and just about any place I can think of. The accumulation, as I like to call it, includes all kinds of material related to the Indian matchbox industry.
Within this rapidly growing accumulation, I often come across labels and subjects that I get curious about and that is how my collection takes a thematic approach.
My recent exhibition, titled "Matchbox Labels And The Stories They Tell", features some prominent trends and themes spanning the entire history of the matchbox industry.
I exhibited 5,000 labels from my collection of 25,000.
AE Matcheswala was an early matchbox label which started using sulphur. It set up its factories in Mumbai in western Maharashtra and Khambhat (also known as Cambay) in Gujarat state, and continued to trade in matchboxes until after World War Two.
The company exported its matchboxes to Arab countries. Ambarnath, written in Hindi on this label, was the location of the first Wimco factory in western Maharashtra state. Very few Wimco labels used Indian languages and they did not last long. This rather drab label featuring the dhow is not one of their common brands.
This label promoted the Swadeshi (self-reliance) movement during the partition of India's Bengal region in 1905. A number of Indian labels started during the independence struggle after calls were made to boycott British goods. Most firms used Indian languages to add nationalist fervour to their brands. Labels from the 1920s and 30s tell the story of India's struggle for freedom. Some labels even celebrated important personalities associated with the freedom movement.
It's believed that this matchbox was commissioned by the royal family of Bhavnagar in western Gujarat state for their personal use during British rule. Little is known about such matchboxes because records were not kept at the time and little research is possible today.
Many Bollywood films were promoted on matchboxes in the 1950s. Some labels even featured Pakistani films. Actors and film posters continue to be featured on matchboxes today.
(Closed): Wall Street finished its final day of 2015 down, marking its worst annual performance in seven years.
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I have been collecting matchboxes seriously since 2012.