AFP
A further sharp drop in global oil prices to fresh four-year lows yesterday following Opec’s decision to hold output pulled stocks in various directions, leaving Europe’s main equity markets broadly flat.
London’s benchmark FTSE 100 index slipped 0.01% to end the day at 6,722.62 points, while in Frankfurt the DAX 30 added 0.06% to 9,980.85 and Paris’s CAC 40 rose 0.18% to 4,390.18 points.
The 12-nation Organisation of Petroleum Exporting Countries (Opec) decided on Thursday to maintain its output ceiling at 30mn barrels per day, where it has stood for three years, sending prices plunging in an over-supplied market.
London Brent oil for January delivery sank early on Friday to $71.12 per barrel — hitting the lowest level since July 7, 2010.
US benchmark West Texas Intermediate for January meanwhile had slumped to a four-year trough at $67.75. “Shares in Europe flatlined yesterday after Opec’s decision not to cut production sent oil stocks lower but travel and leisure shares higher,” said analyst Jasper Lawler at CMC Markets UK.
There were similar movements in US.
Approaching midday, the Dow Jones Industrial Average had gained 0.27% to 17,875.95 points.
The broad-based S&P 500 slid 0.11% to 2,070.61, while the tech-rich Nasdaq Composite Index gained 0.27% to 4,800.43.
In London, shares in British oil major BP slumped 1.4% to 420 pence, and rival Royal Dutch Shell saw its ‘B’ share price drop 1.9% to 2,223 pence.
In Paris, French oil and gas giant Total shed 2.0% to €44.99.
In the US, Dow members ExxonMobil fell 3.6% to $91.10 and Chevron dropped 5.3% to $109.00. Oil services titan Halliburton plummeted 11.4% to $41.96, while independent producer Continental Resources tanked 20.7% to $40.58.
While slumping oil prices weigh on the energy sector, they also boost airline earnings by slashing the cost of jet fuel or kerosene, which is refined from crude.
Air France-KLM shares in Paris had rallied 6.4% to €8.48.
British no-frills airline EasyJet meanwhile saw its shares climb 1.2% to 1,653 pence in London.
In New York, American Airlines jumped 8.5% to $48.78 and Delta Air Lines rose 6.3% to $47.02.
ETX Capital analyst Daniel Sugarman noted that “the drop in oil price means cheaper running costs” for airlines.
In foreign exchange trade yesterday, the euro slid to $1.2436 from $1.2467 late in New York on Thursday. The single currency rose to 79.54 pence from 79.22 pence late Thursday, while the pound edged up to $1.5637 from $1.5736.
On the London Bullion Market, gold slid to $1,182.75 an ounce, compared with $1,194.75 late on Thursday.
