Sector movers: Oil stocks under pressure as crude continues to slide

West Texas Intermediate (WTI) futures for January delivery were down 2.4% at $64.27 a barrel by the afternoon in London, while Brent for January delivery was 2.9% lower at $67.07 a barrel.

WTI was extending losses after reaching $65.84 on Friday, its lowest close since July 2009, while Brent dropped as low as $66.77 on Monday, its worst intra-day level since October 2009.

Crude is still under pressure in the aftermath of a meeting last month of the Organization of Petroleum Exporting Countries (OPEC) at which members resisted calls to scale back output amid a supply glut.

Morgan Stanley on Monday lowered its estimate for Brent crude next year from $98 to just $70 a barrel, saying: "Without OPEC intervention, markets risk becoming unbalanced, with peak oversupply likely in the second quarter of 2015."

A number of heavyweight oil stocks were suffering losses in London including Shell, Tullow Oil, BG Group and BP. FTSE 250 peers Afren, Enquest and Ophir Energy were also out of favour.

Oil equipment, services and distribution stocks were also feeling the impact on continuing concerns that producers will scale back or defer spending on their projects.

In a research report last week, analysts at Barclays estimated that capital expenditure at oil companies across Europe will decline by 7%.

Oilfield services peers Petrofac, Wood Group and Hunting were all trading with heavy losses.

Top performing sectors so far today

Technology Hardware & Equipment 1,157.16 +1.13%
Insurance (non-life) 1,894.07 +0.12%
Software & Computer Services 1,250.29 +0.04%

Bottom performing sectors so far today
Forestry & Paper 11,643.84 -1.91%
Oil & Gas Producers 7,097.79 -1.91%
Construction & Materials 4,075.97 -1.72%
Food Producers & Processors 8,276.61 -1.70%
Oil Equipment, Services & Distribution 16,888.17 -1.35%