Sector movers: Oil stocks tank as OPEC reportedly maintains target, crude extends losses

Concerns about falling oil prices hammered stocks in the energy sector on Thursday, with shares extending losses on reports that the Organization of Petroleum Exporting Countries (OEPC) has held off from scaling back production at its meeting in Vienna.

Brent futures for January delivery were down 3.5% at $75.01 a barrel on the ICE in London by 15:12 after it emerged that OPEC members had decided to maintain its 30m barrels a day.

Oil companies were hoping, albeit cautiously, that OPEC would cut output to curb a supply glut that has sent oil prices to their lowest in over four years.

While sticking to its current production ceiling of 30m bbl/day will involve members lowering supply by 300,000 bbl/day, based on October's output levels, this is likely to have very little impact on easing the downwards pressure on prices.

Shares of oil producers in London, already trading with losses ahead of the meeting, plunged further in the red as the reports emerged.

On the FTSE 100, Shell was down nearly 3%, BP lost 2%, while BG Group and Tullow dropped nearly 4%.

Meanwhile on the FTSE 250 the losses were more considerable with Afren and Enquest down over 7%, Premier Oil dropping 5%.

It is thought that the smaller producers may not have the scale to mitigate the impact of any further falls in the oil price, with the costs of production higher than many of their larger peers.

Stocks in the energy services sector was also taking a big hit on concerns that depressed oil prices may prompt explorers and developers to be more prudent with their spending.

Oilfield services group Petrofac, which has been under pressure since a profit warning two weeks ago linked to the recent slump in oil, had lost 6% of its value.

Other oil services stocks such as Wood Group and Hunting were also suffering heavy losses.

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