Sector movers: Oil and gas stocks drag London market lower

The ongoing oil price decline dented confidence in the London market on Monday, with a plethora of energy and oilfield services companies tumbling in its wake.

The FTSE 100 closed 0.24% or 14.77 points lower at 6,223.52, while the FTSE 250 ended down by 0.06% or 10.84 points at 17,516.76. Oil benchmarks headed lower on Monday, after OPEC rolled over its crude production level, which was last set at 30m barrels per day, but declined to offer an exact figure at the conclusion of its oil ministers' summit in Vienna, Austria late last week.

Secretary General Abdalla Salem El-Badri said, "OPEC will wait and see how the market develops over the next six months, and saw no need to alter the current production level during a period of market adjustment."

In wake of the OPEC announcement, both Brent and WTI closed over 3% lower on Friday. The short-term bearishness subsequently extended to Monday’s session with Brent down another 4.37% to $41.12 per barrel, and WTI down 4.95% to $37.99 per barrel at 1650 GMT, lurking around six and seven-year lows respectively.

Industry surveys suggest OPEC's production for November was at 32.1m bpd, well in excess of the cartel’s stated levels. Predictably, stocks from the oil and gas sector took a pounding.

Royal Dutch Shell (‘B shares down 4.56% / ‘A’ shares down 4.23%) was the biggest FTSE100 faller with peers BP (down 3.36%) and BG Group (down 4.09%) not far behind.

Among the midcaps, Premier Oil (down 11.15%), Tullow Oil (down 8.44%), and diversified mining company Vedanta Resources (down 7.01%) were the biggest fallers. Oilfield services companies Petrofac (down 5.61%) and Hunting (down 4.68%) were other notable fallers.

Marginal positivity was provided by Rolls-Royce (up 2.69%), with the aerospace company leading the FTSE 100 gainers after a Sky News report suggested that senior representatives of activist American fund ValueAct will meet the company’ president.

The fund has become the company’s biggest shareholder and it marks the first formal talks about its plans to revive the struggling manufacturer.