Markets: Chevron woes have knock-on effect

By DOMINIC JEFF
Published on Saturday 28 January 2012 03:41

WEAK earnings from US peer Chevron pushed Scottish oil stocks lower yesterday, with firms along the supply chain affected.

Declining output and squeezed refining margins at America’s second largest oil company meant its fourth-quarter profit slipped to $5.1 billion (£3.2bn), from $5.3bn, even though benchmark oil prices rose during the period.

Melrose Resources was among the biggest fallers, down 4.4p at 122p. Edinburgh stable mate Cairn Energy shed 1.8p to 282.2p.

Meanwhile Aberdeen-based energy services company Wood Group dropped 11p to 653p and Glasgow pumps and valves maker Weir Group lost 52p to 1,970p. The oil and gas sector had avoided the riskier asset bloodbath in 2011 as investors focused on its growth characteristics, strong balance sheets and dividend attractions, and it is in part suffering now as investors rotate out of previous winners.

BG Group shed 2.6 per cent to 1,430.5p, while heayweight BP was also down 2.6 per cent after it lost an attempt to shift over $15bn of costs related to the Gulf of Mexico oil spill onto contractor Transocean.

Analysts at Nomura said the US court ruling made it less likely that BP will settle with its former contractors on the Deepwater Horizon rig before the matter goes to full trial next month. The oil giant’s shares were 12.2p lower at 464.6p.

Disappointing GDP data from the US didn’t help sentiment, and dragged down commodity stocks that rely on demand from manufacturers. Copper giant Antofagasta topped the fallers’ board, down 42p at 1,348p. Kazakhmys was not far behind, dropping 34p at 1,160p, as London’s FTSE 100 Index closed 61.75 points lower at 5,733.45.

NEW YORK: US stocks trimmed earlier losses to end little changed last night, as investors saw dips in the market as an opportunity to buy into what’s been a strong first month of 2012.

The Dow Jones industrial average was down 74.17 points, or 0.58 per cent, to end at 12,660.46 while the broader Standard & Poor’s 500 Index was down 2.11 points, or 0.16 per cent, to finish at 1,316.32. But the Nasdaq Composite Index rose 11.27 points, or 0.40 per cent, to close at 2,816.55.

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