Europe open: Stocks in the red as oil prices decline on OPEC doubts

European stocks fell in early trade, with energy issues pacing the decline as hopes of a deal to cut oil production at Wednesday’s meeting of the Organization of the Petroleum Exporting Countries began to fade.

At 0840 GMT, the benchmark Stoxx Europe 600 index was down 0.7%, Germany’s DAX was 0.8% lower and France’s CAC 40 was off 0.9%. Italy’s FTSE MIB suffered the heaviest losses, down 1.8% amid worries about the upcoming referendum.

Meanwhile, oil prices were under pressure as Saudi Arabia said it won’t meet with non-OPEC Russia ahead of the OPEC summit in Vienna as originally planned.

Saudi Arabia, which is the world’s largest oil producer, said on Friday that it wouldn’t attend the meeting unless there was “a clear decision from OPEC” on production cuts.

West Texas Intermediate was down 1.3% to $45.46 a barrel while Brent crude was 1.4% weaker at $46.59. The Stoxx 600 oil and gas sub-index dropped 1.4%, while Total shed 1.4% and BP was down 1.6%.

Accendo Markets analysts Mike van Dulken and Henry Croft said: “Today’s meeting between OPEC and non-OPEC producers will be significant, albeit for the wrong reasons as Saudi Arabia’s absence draws the headlines. Expect running commentary throughout the day (and week) to increase the price volatility of both Brent and US crude and energy names.”

In corporate news, Aberdeen Asset Management was a high riser after its annual results were in line with expectations and the company maintained its dividend.

Antofagasta edged higher after agreeing to sell the Michilla mine to Chilean mining group Haldeman Mining Company for up to $52m following the closure of the mine at the end of last year.

On the downside, Swiss food group Aryzta was under the cosh after it reported a drop in quarterly revenue due to lower sales in North America.

Tesco fell following a report in The Times that investigators are looking into whether Tesco Bank ignored a warning about a security flaw in its payment system that allowed fraudsters to steal millions of pounds from the accounts of thousands of its customers.