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Oil companies lead Britain's FTSE lower as crude prices fall

Fri, 14th Aug 2015 13:44

* FTSE 100 down 0.2 pct

* TUI adds 3 pct to Thursday's 6.6 pct jump

* Glencore touches an all-time low (Adds detail, updates prices)

By Liisa Tuhkanen

LONDON, Aug 14 (Reuters) - Britain's top equity index edgedlower on Friday, with a decline for commodities stocks, such asBP and Royal Dutch Shell, overshadowing gains intravel group TUI.

The blue-chip FTSE 100 index eased 0.2 percent by1330 GMT after a near-flat close of 6,568.33 points on Thursday.

Oil producers and oilfield service providers led the losersas U.S. crude oil prices dropped to their lowest in almost 6-1/2years, with huge stockpiles and refinery shutdowns heighteningconcerns about global oversupply.

"Ongoing commodity demand restraint in China alongsideincremental supply growth out of OPEC and the US continue to beformidable market headwinds," Goldman Sachs said in a note.

Royal Dutch Shell, Weir Group and Tullow Oil all declined more than 1 percent, roughly in line withthe FTSE 350 Oil & Gas Financial index.

BP slid the most, down 1.4 percent, after a U.S. judge onThursday found that it had manipulated the natural gas market in2008, as alleged by the U.S. energy regulator.

Glencore slipped to touch an all-time low after theminer and commodity trading group said it had sold stakes inthree mines for about $290 million.

"It's very difficult to know whether or not we'll see anyrecovery on that one," London Capital Group analyst Brenda Kellysaid.

"Ultimately, the commodities market does remain underpressure," she said.

On the upside, TUI was the biggest blue-chip gainer after JPMorgan and Jefferies lifted their target price on the stock,sending the company up 3 percent after a jump in the previoussession when it forecast earnings at the top end of analysts'expectations. [ID;nL5N10O0QV]

Among other individual gainers, chipmaker Arm Holdings edged slightly higher.

"ARM's equity story will continue to be one based on strongtop-line growth contributing to sector-leading earnings and cashflow growth," Barclays wrote in a note.

"We see both near- and long-term prospects being as strongas ever, although recent concerns around end market growth havecaused a material underperformance for ARM shares."

The FTSE 100 rose to a record 7,122.74 points in late Aprilbut has since given up most of the gains it made in 2015. (Editing by Robin Pomeroy)

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