Sector movers: Shell dampens oil sector as earnings slump

1st Aug 2013 14:53

A cool reaction to second-quarter results from Royal Dutch Shell meant that the oil and gas sector was the worst performing category of the day on Thursday as the oil major's earnings sank sharply year-on-year.Shell's earnings, on a current cost of supplies (CCS) basis, dropped to $2.4bn from $6.0bn for the same quarter a year earlier. The company, whose was down 4.11% at 2,146p by 15:27, blamed higher costs, exploration charges, adverse currency exchange rate effects and challenges in Nigeria.Richard Curr, Head of Dealing at Prime Markets, said: "Given the currently volatile nature of oil giants in relation to the environment in the wake of the BP Gulf of Mexico disaster, sentiment toward this sector is mediocre at best, meaning that the market reaction to news such as today may seem disproportionately savage."[Chief Executive Officer] Peter Voser and his team have their work cut out to restore confidence in the oil giant, but until that happens, Prime Markets will continue to rate Shell shares as a firm 'sell'," Curr said.Rival oil giant BP also disappointed with its second-quarter figures on Tuesday as underlying profits came in short of analysts' expectations by around 20%.Sector peers Ophir Energy, Salamander Energy, JKX Oil & Gas, Essar Energy, Chariot Oil & Gas and Sound Oil were also in the red on Thursday.Top performing sectors so far todayMining 16,210.74 +2.48%Technology Hardware & Equipment 1,070.51 +2.00%Tobacco 38,698.54 +1.70%Banks 5,192.86 +1.69%Forestry & Paper 10,712.12 +1.58%Bottom performing sectors so far todayOil & Gas Producers 7,952.14 -1.91%Industrial Transportation 2,977.51 -0.60%Electricity 9,925.74 -0.32%Insurance (non-life) 1,824.21 -0.29%Health Care Equipment & Services 4,387.42 -0.14%BC