Sector movers: Oil stocks drops as IEA warns of further crude declines

A fall in oil prices was hitting shares in the energy sector on Friday after the International Energy Agency (IEA) warned that crude may have further to fall.

In its monthly report, the Paris-based institution said that the partial rebound that occurred at the start of the year seems to have paused with Brent having become range-bound at around $60 a barrel.

"Behind the facade of stability, the re-balancing triggered by the price collapse has yet to run its course, and it might be overly optimistic to expect it to proceed smoothly," the IEA said.

It said that US supply has showed "little sign of slowing down [and] continues to defy expectations".

Brent was trading 2% lower at $55.92 a barrel in afternoon trade.

Producers BG Group, Tullow Oil, Soco International and Premier Oil were all trading with heavy losses in London, along with oil and gas services groups Hunting, Wood Group and Petrofac.

However, Afren was the standout faller, dropping 29% after the struggling oil and gas group proposed a debt-for-equity swap with creditors to address its funding needs and recapitalise its capital structure.

Afren said the plan "will result in substantial dilution for existing shareholders", though if shareholders don't approve the plan, the company will have no choice but to initiate a sale.

Top performing sectors so far today

Automobiles & Parts 8,608.76 +1.71%
Technology Hardware & Equipment 1,387.00 +1.64%
Real Estate Investment Trusts 3,255.32 +1.33%
Electronic & Electrical Equipment 4,335.82 +1.08%
Mobile Telecommunications 4,986.34 +1.00%

Bottom performing sectors so far today
Oil Equipment, Services & Distribution 17,064.66 -2.89%
Mining 13,412.64 -2.50%
Industrial Metals & Mining 1,826.94 -2.37%
Oil & Gas Producers 6,660.87 -1.90%
Electricity 8,757.16 -1.60%