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London Oil & Gas Stocks Spurred As Weak US Dollar Supports Oil Price, Petrofac, Tullow & Cairn Energy Rise

8th Oct 2009, 8:28 am London Oil & Gas Stocks Spurred As Weak US Dollar Supports Oil Price, Petrofac, Tullow & Cairn Energy Rise

Today in European trading crude oil stabilised by 0.75% following last nights decline. At $70.10 the crude oil price has continued to gain some support from the persistent decline of the US Dollar despite the growing over-supply issues facing the US Oil and Gasoline markets.


On London’s Intercontinental exchange West Texas Intermediary (WTI) crude futures bounced to trade above $70.50 as European equity markets opened but the rebound has eased somewhat as the day progressed.


Wednesday’s Crude oil price eased somewhat following the week’s key inventory report from the US Department of Energy. The inventory report generally missed analyst expectations. On the one hand, Crude inventories unexpectedly fell almost 1m barrels however gasoline distillates rose three times more than anticipated. On the face of it, many investors will still be left to ponder the ongoing US supply picture.


Investors who have been following the supply data will now assess the relative strength of the American consumption outlook. Against a backdrop of high unemployment and a weakening dollar, many commentators believe the apparent outlook for the oil market remains clouded.


On the London Stock Exchange oil and gas equities have generally strengthened, with the exception of British Petroleum (LSE: BP.) and Royal Dutch Shell (LSE: RDSB) who both eased marginally dropping around one quarter of a percent. Petrofac (LSE: PFC) and Tullow Oil (LSE: TLW) both added 2%, while Cairn Energy (LSE: CNE) was up 1.5%. BG Group (LSE: BG) rose marginally in the morning.


Mid caps also were in buying mode. Dana Petroleum (LSE: DNX) and Dragon Oil (LSE: DGO) both added more than 1%, while Heritage Oil (LSE: HOIL) was unchanged.


North American based explorer Nighthawk Energy (AIM: HAWK) and Europe focused oil and gas developer Ascent Resources (AIM: AST) did better with both tacking on 5%. Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) was up 3.5%. Gulfsands Petroleum (AIM: GPX), an oil and gas company with assets in Iraq, Syria and Gulf of Mexico, added 2%.


Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG) and US focused oil and gas junior Caza Oil & Gas (AIM & TSX: CAZA) were among the leading fallers in the sector, shedding over 7%. Latin America operating Gold Oil (AIM: GOO) and EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) both declined 3%.

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