LONDON (Alliance News) - Shares in the UK were lower Monday soon after the open, with oil stocks leading the declines after top crude producers failed to reach a deal on a production freeze on Sunday.
The FTSE 100 was down 0.7%, or 42.40 points, at 6,301.35. The FTSE 250 was off 0.5% at 16,831.04 and the AIM All-Share was down 0.2% at 731.19.
BP shares fell 3.4%, while Royal Dutch Shell's 'A' shares were down 3.1%. In the FTSE 250, Tullow Oil and Ophir Energy were down 3.9% and 3.2%, respectively.
OPEC member countries and major producers from outside the cartel delayed an agreement to freeze crude output levels to shore up low prices, saying they needed "more time for further consultations". The decision followed marathon talks in the Qatari capital of Doha from which OPEC member Iran stayed away.
Qatar's Energy and Industry Minister Mohammed bin Saleh said at a press conference that participants in the meeting had agreed on the need for more time for discussion. Bin Saleh did not give details. The minister added that OPEC members would meet in Vienna on June 2 to consider a possible freeze.
However, bin Saleh ducked questions about whether Iran was to blame for failure to reach the deal. "The freeze could be more effective definitely if major producers, be it from OPEC members like Iran and others, as well as non-OPEC members, are included in the freeze," bin Saleh said.
Brent crude was quoted at USD40.99 a barrel Monday after the open, down from USD42.80 at the London equities close on Friday ahead of the meeting. The North Sea benchmark touched a low of USD40.08 a barrel in early trade Monday, a level it hasn't seen since early April.
"The oil price decline has likely only just begun since the possibility of an output freeze was price into oil at over USD40 per barrel," said CMC Markets analyst Jasper Lawler.
"In the short-term, oil workers in Kuwait on strike protesting over pay appears to be limiting more dramatic declines. If no pact could be reached on Sunday, it seems doubtful the next OPEC meeting on June 2 will be any different," Lawler added.
Nearly 7,000 workers, about 47% of Kuwait's total oil employees, started an open-ended strike - some protesters told dpa - to protest at planned government cutbacks as the OPEC country is struggling with low crude prices. The stoppage prompted the state-run Kuwait National Petroleum Company to implement an emergency plan.
The company's executive Mohammad Ghazi said that the Gulf country's fuel facilities had not been affected by the strike. "The necessary workforce to operate the refineries has been provided from the company's employees," Ghazi said, according to the official news agency KUNA.
Shares of fuel-consuming travel companies rose in response to the oil price slide, with TUI Group up 1.4%, easyJet up 0.8%, International Consolidated Airlines Group up 0.7%, and Carnival up 0.5%. In the FTSE 250, Thomas Cook Group was the best mid-cap performer, up 3.5%, also supported by an upgrade to Hold from Sell by Berenberg.
Elsewhere in London, ARM Holdings was down 3.0% after Jefferies cut the chip maker to Hold from Buy. Meanwhile, miner Rio Tinto was down 2.5%, after a downgrade by Citigroup to Sell from Neutral. The blue-chip releases its operations review later in the day, at 2330 BST.
Reckitt Benckiser Group was up 0.7% after saying it delivered strong like-for-like sales growth in its Health and Hygiene product portfolios in the first quarter, offset by a flat performance in its Home business and a decline in sales for its Portfolio Brands.
Reckitt, which owns brands ranging from Durex condoms to Nurofen painkillers and Dettol cleaning products, said like-for-like sales for its Health product business grew 11% in the quarter to the end of March. It saw good performances from its Durex range, Gaviscon heartburn relief and Strepsils throat lozenges in the quarter.
Housebuilders were trading higher, with Berkeley Group up 2.1%, Persimmon up 1.5% and Taylor Wimpey up 1.3%. In the FTSE 250, Bellway was adding 1.4%.
The average asking price for a house in the UK was up 1.3% on month in April, property tracking website Rightmove said, climbing to a record GBP307,033. That follows the 1.3% increase in March. Among the individual components of the survey, prices in London were up just 0.3% - the slowest of any region as buyers have looked to the suburbs in recent weeks, Rightmove said. On a yearly basis, prices advanced 7.3% after rising 7.6% in the previous month.
In Europe, the CAC 40 in Paris and the DAX 30 in Frankfurt were down 1.1% and 0.7%, respectively.
In Asia, the Japanese Nikkei 225 index ended down 3.4%. In China, the Shanghai Composite closed down 1.4% and the Hang Seng index in Hong Kong was down 1.3%
Toyota Motor Corp said that it will suspend production on its vehicle assembly lines in stages between April 18 and 23, due to parts shortages resulting from the severe earthquakes that struck Japan's island of Kyushu on Thursday and after.
In a thin economic calendar Monday, the US National Association of Home Builders housing market index is due at 1500 BST.
By Daniel Ruiz; danielruiz@alliancenews.com
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