LONDON - Shares in European oil producers and oil services companies dropped on Monday as oil prices fell and stock markets globally felt the fallout of the Lehman Brothers (LEH.N: Quote, Profile, Research, Stock Buzz) bankruptcy filing.
The DJ Stoxx European oil and gas sector index traded down 5.7 percent at 1154 GMT, underperforming a 4.8 percent fall in the DJ Eurostox 50 .STXEc1.
In the past year, rising oil prices meant oil majors such as Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research, Stock Buzz) and BP Plc (BP.L: Quote, Profile, Research, Stock Buzz) were seen as defensive plays amid weakness in global stock markets.
However, with oil down from a peak above $147/barrel in July to under $95/bbl on Monday, the oil majors are now suffering even more than many other sectors.
The companies that build and operate the oil companies' facilities saw their shares hit even more than their clients.
Shares in Saipem (SPMI.MI: Quote, Profile, Research, Stock Buzz), Europe's largest oil services company by market value, fell over 6 percent and industry number 2, France's Technip (TECF.PA: Quote, Profile, Research, Stock Buzz), fell 7.4 percent.
"We have lowered our price targets across the board on average by 8.5% to reflect price-earnings contraction," analysts at Morgan Stanley said in a research note on Monday, citing "more pronounced perceived risks of a continued global economic slowdown".
BP and Shell were down around 4 percent.
The DJ Stoxx European oil and gas sector index traded down 5.7 percent at 1154 GMT, underperforming a 4.8 percent fall in the DJ Eurostox 50 .STXEc1.
In the past year, rising oil prices meant oil majors such as Royal Dutch Shell Plc (RDSa.L: Quote, Profile, Research, Stock Buzz) and BP Plc (BP.L: Quote, Profile, Research, Stock Buzz) were seen as defensive plays amid weakness in global stock markets.
However, with oil down from a peak above $147/barrel in July to under $95/bbl on Monday, the oil majors are now suffering even more than many other sectors.
The companies that build and operate the oil companies' facilities saw their shares hit even more than their clients.
Shares in Saipem (SPMI.MI: Quote, Profile, Research, Stock Buzz), Europe's largest oil services company by market value, fell over 6 percent and industry number 2, France's Technip (TECF.PA: Quote, Profile, Research, Stock Buzz), fell 7.4 percent.
"We have lowered our price targets across the board on average by 8.5% to reflect price-earnings contraction," analysts at Morgan Stanley said in a research note on Monday, citing "more pronounced perceived risks of a continued global economic slowdown".
BP and Shell were down around 4 percent.
