EUROPE MARKETS: European Stocks Struggle As Oil, Auto Shares Pull Back

By Carla Mozee, MarketWatch Features Dow Jones Newswires

Trump complains about German car sales in the U.S., Der Spiegel reports

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European stocks were in the red Friday, putting the regional benchmark on track for a weekly decline, with oil and gas shares pulled lower on disappointment stemming from OPEC's agreement to extend production cuts.

The Stoxx Europe 600 fell 0.5% to 390.16, with energy and financial shares faring the worst. But health care, telecom and consumer services shares held to small gains.

The Stoxx Europe 600 Oil & Gas Index slumped 1.3%, under pressure after oil prices sank Thursday. The selloff came as the Organization of the Petroleum Exporting Countries and non-OPEC members didn't include deeper crude-output cuts as part of a renewed agreement (http://www.marketwatch.com/story/opec-says-it-will-extend-production-cuts-through-march-2018-2017-05-25) to cap production through March 2018. Output will remain at 1.8 million barrels a day.

Among oil-services companies, shares of Subsea 7 SA (SUBC.OS) fell 4.6%, TechnipFMC PLC (FTI.FR) was down 2.8% and SBM Offshore NV (SBMO.AE) moved 1.6% lower.

Among oil producers, OMV AG was lower by 3.8%, Statoil ASA (STL.OS) was drawn 1.7% lower and France's Total SA (TOT) gave up 1.9%.

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Energy shares remained lower even as oil prices on Friday turned slightly higher after Thursday's nearly 5% slide for West Texas Intermediate crude to below $49 a barrel.

"OPEC fell short of providing an upside surprise factor beyond what was already priced in," said Helima Croft, head of commodity strategy at RBC Capital Markets, in a Thursday note.

The drop in oil prices "is a function of a corner of the market that remains skeptical on the impact of OPEC's cuts. The market will remain hesitant and wait for data confirmation before prices can move materially higher," she wrote.

However, OPEC's announcement "will ultimately help to reset the base for prices in the low $50-a-barrel range and act to refocus attention squarely on forward looking fundamentals," Croft wrote.

Read:16 energy stocks that company executives love, regardless of what OPEC does (http://www.marketwatch.com/story/16-energy-stocks-that-company-executives-love-regardless-of-what-opec-does-2017-05-25)

The pressure on oil shares is contributing toward what will likely be a weekly loss of 0.3% for the Stoxx Europe 600.

Stock movers: On the German DAX 30, shares of auto makers were lower after a Der Spiegel newspaper report (http://www.marketwatch.com/story/trump-reportedly-suggested-limiting-german-car-sales-2017-05-25) that U.S. President Donald Trump complained to European officials about Germany's exports. Trump reportedly said the Germans sell "millions" of cars in the U.S., and "we'll stop that."

Shares of BMW AG (BMW.XE) fell 1.4%, Daimler AG (DAI.XE) was down 0.9$ and Volkswagen AG (VOW.XE) fell 1%.

Petrofac Ltd. (PFC.LN) was down 5.2%, extending its 30% plunge in the previous session after the oil services company said it suspended Chief Operating Officer Marwan Chedid until further notice (http://www.marketwatch.com/story/petrofac-suspends-coo-as-uk-conducts-probe-2017-05-25). The company is under U.K. investigation on suspicion of bribery, corruption and money laundering. Petrofac said it's cooperating with authorities.

Spirax-Sarco Engineering PLC (SPX.LN) jumped 6.4% after the steam-system engineering company said it's buying Chromalox Inc. in a $415 million deal (http://www.marketwatch.com/story/spirax-sarco-buys-chromalox-for-415-million-2017-05-26).

Indexes: Germany's DAX was down 0.5% at 12,561.36. France's CAC 40 index flopped down 0.8% to 5,292.57 and Italy's FTSE MIB fell 1%.

The U.K.'s FTSE 100 was up 0.1% at 7,525.43, and earlier touched an all-time high (http://www.marketwatch.com/story/ftse-100-at-all-time-high-with-the-pound-knocked-below-129-2017-05-26) aided by a drop in the pound after a poll showed the Conservative Party's lead shrinking before the June 8 general election.

The euro bought $1.1217, not far off from $1.1217 late Thursday in New York.

(END) Dow Jones Newswires

May 26, 2017 06:21 ET (10:21 GMT)