European Oil Stocks Drop Most On Record After Crude Plunge

(Bloomberg) --

European oil stocks tumbled the most on record, wiping about $95 billion in value off the gauge in one day, after the breakdown of OPEC+ talks on supply cuts triggered an all-out price war between Saudi Arabia and Russia.

The Stoxx 600 Oil & Gas index fell 17% to the lowest level since 1997, dragged down by declines of at least 15% for heavyweights including Total SA, BP Plc and Royal Dutch Shell Plc. All 22 stocks on the index traded lower, with Poland’s biggest refiner PKN Orlen SA outperforming after the company on Friday reassured investors about its dividend policy.

Oil futures fell more 30% in New York and London on Monday, the biggest drop since the Gulf War in 1991, before pulling back to around a 20% decline. Goldman Sachs Inc. warned that Brent prices could dip into the $20s range, a view echoed by Citigroup Inc.

“With too many unknowns around global economic growth, oil demand growth, the shape of the shale curve, and now OPEC/Russia supply intentions we are in unchartered waters at least for the short term,” Sanford C. Bernstein analyst Oswald Clint wrote in a note. The broker downgraded the European integrated oil sector and cut Shell, Total, Eni SpA, Equinor ASA and Repsol SA to market perform. “Fundamentals are unlikely to win out short term.”

Equity indexes in Saudi Arabia, Dubai, Abu Dhabi, Qatar and Kuwait slumped for a second day, while Saudi Aramco extended losses in the past two sessions to more than 15%. U.S. oil majors and oil services and equipment stocks also slumped.

“The implications for oil look dire,” UBS AG analyst Jon Rigby said. “There are no winners, only the less badly hurt.”

Read more:

• Double Whammy to U.S. E&Ps: Saudi Oil Flood, Virus Biting Demand
• Stocks Plunge, U.S. Yields Crater Amid Oil Shock: Markets Wrap
• Historic Day in Markets Has Traders Rethinking What’s Possible
• Panicky Mood Reigns in European Stocks Heading for Bear Market
• Oil Crash Sends Aramco, Gulf Bonds and Stocks Reeling

--With assistance from Gregory Calderone.

To contact the reporters on this story: Sam Unsted in London at sunsted@bloomberg.net;Filipe Pacheco in Dubai at fpacheco4@bloomberg.net

To contact the editors responsible for this story: Beth Mellor at bmellor@bloomberg.net, Namitha Jagadeesh, Morwenna Coniam

©2020 Bloomberg L.P.