LONDON (ShareCast) – (ShareCast News) – Oil and gas stocks were under pressure on Friday as the price of crude fell amid OPEC’s proceedings.
Brent crude fell 1.9% to $43.02 per barrel while West Texas Intermediate plunged 2.8% to $39.96 per barrel at 1539 GMT.
The dip in prices came after sources told Reuters OPEC has decided at its semi-annual meeting in Vienna to raise its production ceiling to 31.5 million barrels of oil a day.
Oil markets had priced in a no change scenario in terms of OPEC’s production. Speaking before Friday’s OPEC proceedings, Saudi Oil Minister Ali Al-Naimi said he “would listen to other members concerns” about the state of the market.
“Well we hoped for a cut and instead and it’s looking more like we are actually getting an increase (to be confirmed) in quotas to 31.5mmbbl/d. Thanks for that,” said Dougie Youngson, oil and gas research director at FinnCap.
“Given that OPEC has been overproducing this is actually making what they are already doing ‘official’. This level of quota is actually what OPEC has been producing for most of this year so the market shouldn’t have taken this so badly, unless we work on the assumption that it will overproduce above this level in 2016. One hopes not. ”
BP and Royal Dutch Shell (Xetra: R6C1.DE – news) were among the worst performers on the FTSE 100. On the FTSE 250, Tullow Oil (LSE: TLW.L – news) and Nostrum Oil & Gas (Stuttgart: 3NO.SG – news) slid.
On the upside, software and computer services were topping the sectors, led by Sage Group (LSE: SGE.L – news) . Industrial metals and miners also rallied, as metal prices jumped. Gold (Other OTC: GDCWF – news) (+2.18%), silver (+3.15%), copper (+0.87) were up on the COMEX while spot platinum surged 4.04%
Top performing sectors so far today
Industrial Metals & Mining 755.89 +1.05%
Household Goods & Home Construction 16,135.38 +0.85%
Construction & Materials 5,143.60 +0.82%
Food Producers & Processors 9,046.45 +0.57%
Bottom performing sectors so far today
Forestry & Paper 16,017.01 -3.50%
Oil Equipment, Services & Distribution 12,525.66 -2.62%
Oil & Gas Producers 5,847.79 -1.93%
Mining 7,596.48 -1.59%
Industrial Engineering 7,162.91 -1.31%
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