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BP, Shell, Tullow Oil and Cairn Energy decline as crude slips below $78

30th Jul 2010, 4:40 pm BP, Shell, Tullow Oil and Cairn Energy decline as crude slips below $78

Oil prices retreated today after equity markets switched to selling mode after a US GDP update showed a decline to a 2.4% growth rate in Q2 from 2.7% in Q1, which was slightly below the projected 2.5%.

Crude oil futures have been in decline, pressured by mixed economic data and signs of declining demand in the US reflected in this week’s inventories reports.

Wednesday’s data from Energy Information Administration revealed an increase of 7.3 million barrels in US crude inventories. The EIA report said that gasoline stockpiles added 100,000 and distillates, which include diesel and heating oil, rose by 900,000 barrels. Tuesday, report from the American Petroleum Institute (API) showed a gain of 3.8 million barrels in US crude stockpiles.

Yesterday’s employment data from the Labor Department showed that continuing jobless claims increased by 81,000 to 4.56 million. Initial claims, however, fell by more than expected, shedding 11,000. Earlier this week, the Conference Board’s consumer confidence index declined to five month lows at 50.4, while the Richmond Fed manufacturing index declined to 16 from 23 in July. This followed Monday’s update on the Dallas fed index showed a drop to -21 in July from -4 in June.

A 1% decline in US durable goods orders also disappointed investors, as did the downbeat Beige Book survey, in which the Fed noted the slowing manufacturing activity and weakness in the housing market.

The University of Michigan’s consumer confidence index for July will also be released today.

September Brent Crude declined to US$76.48/barrel, while US light, sweet crude for September delivery slid to US$77.47/barrel.

Blue chip oil and gas producers were in decline today with the sole exception of BG Group (LON:BG), which managed to add 1%.

Tullow Oil (LON:TLW) was down 1.6%, while Cairn Energy (LON:CNE) posted a small loss.

Supermajprs BP (LON:BP) and Shell (LON:RDSB) shed 1.3% and 1% respectively.

Petrofac (LON:PFC) lost nearly 2%, while another oil and gas engineering firm Amec (LON:AMEC) was sitting just below the opening level.

Most midcaps declined with the exception of Dana Petroleum (LON:DNX) and Dragon Oil (LON:DGO), which posted small gains.

Heritage Oil (LON:HOIL) shed less than 1%. Soco International (LON:SIA) declined 1.4%, while JKX Oil & Gas (LON:JKX) and Premier Oil (LON:PMO) dropped 1.7%.

Melrose Resources (LON:MRS) retreated 3.5%, while Salamander Energy (LON:SMDR) was at the bottom of the pile with a loss of nearly 7%.

Services companies Wood Group (LON:WG) and Wellstream Holdings (LON:WSM) each lost just over 2%.

Mongolia-focused Petro Matad Ltd (LON:MATD) rallied 21% to take the lead in the sector. Europe focused oil and gas developer Ascent Resources (LON:AST) also did well, climbing 6%.

North America focused oil & gas junior Pantheon Resources (LON:PANR) and Aminex (LON:AEX) slipped 11% and 6% respectively.

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