Oil prices strike new lows, weighing on energy stocks

GMT 14:48 2014 Monday ,01 December

Arab Today, arab today Oil prices strike new lows, weighing on energy stocks

Pump jacks are seen at dawn in an oil field near Lost Hills
London - AFP

Crude oil prices sunk to fresh low points on Monday, dragging down the share prices of energy companies, while miners were hit by weak Chinese manufacturing data, traders said.
"Oil sector stocks have driven the FTSE lower," said market analyst Alastair McCaig from the IG trading group.
Countering the downward trend, shares in German power giant E.ON soared on company's plans to spin off its conventional energy operations and focus on renewables.
Oil futures tumbled to their lowest levels for five years on Monday, extending last week's sharp sell-off in response to OPEC's decision to maintain output despite a supply glut and plunging prices.
US benchmark West Texas Intermediate (WTI) for delivery in January hit $63.72 a barrel -- the lowest level since July 2009.
Brent crude for January sank to an October 2009 low of $67.53.
"Investors see crude as remaining vulnerable after last week's OPEC announcement," said Michael McCarthy, chief strategist at traders CMC Markets in Sydney.
"We have not yet seen any piece of news or development that could trigger a bottoming-out phase in oil prices," he told AFP.
The unabated price plunge comes after the 12-nation Organization of Petroleum Exporting Countries opted Thursday to keep its collective output ceiling at 30 million barrels per day, where it has stood for three years.
OPEC has come under pressure from its poorer members, including Venezuela and Ecuador, to trim production as slumping prices have eaten into government revenues and raised fears over their economies.
But the group's powerful Gulf members, led by kingpin Saudi Arabia, resisted the calls unless they are guaranteed market share -- particularly in the United States, where rising production of shale oil has contributed to the global glut.
- Sliding oil hurts stocks -
London's benchmark FTSE 100 index shed 0.97 percent to stand at 6,657.70 points approaching midday in the British capital.
Frankfurt's DAX 30 lost 0.36 percent to 9,944.79 points and the CAC 40 index in Paris dropped 0.46 percent to 4,370.07 compared with Friday's close.
"General profit-taking after a stellar November and reassessment of the time frame of possible further action by the ECB is putting pressure on stocks," said Markus Huber, senior analyst at broker Peregrine & Black.
"There is also more disappointing news out of China," he noted.
The slowdown in Chinese growth, and hence oil demand, has also added to downward pressure on oil prices.
Among the biggest fallers were Tullow Oil, which dived 6.41 percent to 398.7 pence and miner BHP Billiton, that lost 3.0 percent to 1,471.5 pence.
Slumping oil prices are adding to worries about slowing eurozone inflation -- a situation that is likely to make the European Central Bank increasingly nervous and pave the way for further monetary easing, according to analysts.
- Ruble knocked -
In foreign exchange on Monday, the euro rose to $1.2469 from $1.2443 late in New York on Friday.
The European single currency fell to 79.30 British pence from 79.54 pence, while the British pound gained to $1.5720 from $1.5641.
The beleaguered ruble meanwhile hit new record lows as sliding oil prices increased worries about the economy in Russia, a major producer of crude.
The Russian currency dropped more than 8 percent during trading on Monday, slumping to 53.29 rubles against the dollar and 66.50 rubles against the euro in afternoon trading on the Moscow Exchange.
The ruble has now depreciated by some 40 percent this year, due to falling oil prices and Western sanctions imposed against Russia's support for a separatist uprising in eastern Ukraine.
On the London Bullion Market, gold slipped to $1,178.75 an ounce from $1,182.75 on Friday.
The metal took a hit after the Swiss on Sunday voted against the idea of their country significantly hiking its gold reserves.

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