HomeBusiness/EconomyEuropean Markets Decline As Oil Stocks Decline Due To Demand Concerns

European Markets Decline As Oil Stocks Decline Due To Demand Concerns

Heavyweight energy stocks fell on concerns about oil demand following weak economic data in the U.S., which contributed to a decline in European shares on Tuesday. At the same time, producer prices in the euro zone fell in February for the fifth consecutive month.

Oil and gas equities reversed early gains and weighed on the STOXX 600 index, which closed 0.1% down.

Oil majors including Shell, BP, Tenaris, and TotalEnergies saw their share prices fall between 1.0% and 2.5% as oil prices lost some of their early gains following news that U.S. industrial output fell to its lowest point in nearly three years in March as new orders plummeted.

According to Stuart Cole, senior macro economist at Equiti Capital, “there is also rising speculation that the current OPEC output cut was premised on projected decreased demand going forward, rather than a pure pricing play per se.”

On Monday, after OPEC+ announced voluntary production cuts of 1.66 million barrels per day (bpd) from May until the end of 2023, energy stocks saw their largest one-day rise since November.

According to Sophie Lund-Yates, chief stock analyst at Hargreaves Lansdown, “the surprise output cut from OPEC+ continues to stir concerns over inflation.”

The heavily weighted FTSE 100 in Britain fell 0.5%, breaking a six-day rising streak and trailing other markets.

In the meantime, producer prices in the euro zone declined in February for the fifth consecutive month and by a larger amount than anticipated, largely as a result of falling energy prices.

Due to the fact that producer pricing increases are frequently passed on to final consumers, they serve as an early warning of inflationary trends.

Consumers in the euro zone were less optimistic about growth and unemployment in February and had lower expectations for inflation, according to an ECB survey.

The chairman of Credit Suisse apologized for bringing the company dangerously close to insolvency as he dealt with shareholder rage over the sudden death of a national treasure. The Swiss bank’s stock increased 0.9%.

As the cosmetics company agreed to sell its Australian luxury brand Aesop to Brazil’s Natura & Co for an enterprise value of $2.53 billion, L’Oreal shares increased by 1.2%.
According to Lund-Yates, “this shift to a more opulent and hedonistic brand shows L’Oreal is padding out its offering to assist protect against an increasingly competitive market.”

Must Read

CATEGORIES

0
Would love your thoughts, please comment.x
()
x