Total, BP Lead Oil Stocks to 5-Year Low on Recession Concern

By Fred Pals

Oct. 10 (Bloomberg) -- The Dow Jones Europe Stoxx Oil & Gas Index dropped to its lowest in more than five years, led by Europe's three biggest oil companies, as crude prices slumped on concern the global economy will fall into a recession.

The 40-company index fell as much as 9.2 percent to 242.70, the lowest since May 2003. BP Plc, Europe's second-largest oil producer, declined as much as 9.7 percent to 370 pence, the lowest since March 2003, and traded at 386.25 pence as of 9:14 a.m. in London. Total SA, the continent's third-biggest oil company, slid the most in almost 10 years.

Global stocks have tumbled, driving the MSCI World Index to its worst week in more than three decades, on concern the deepening credit crisis will spur the failure of more financial companies and send economies into a recession. Oil headed for its biggest weekly decline since December 2004, falling as much as 5.3 percent today to $82 a barrel, pacing a slump in commodities.

``Price fluctuations in the commodities markets aren't related to fundamentals but are simply the result of pricing stemming from the broader financial crisis,'' Frederic Lasserre, head of commodities research at Societe Generale, said today in an interview in Paris. ``Oil prices are completely dominated by the financial crisis. There are fears about the consequences of the economic crisis next year.''

Royal Dutch Shell Plc, Europe's largest oil company, fell to its lowest in more than three years, losing as much as 8.6 percent to 1,314 pence in London. The stock traded at 1,375 pence as of 9:16 a.m. local time. Total sank as much as 12 percent to 31.75 euros and was at 33.88 euros as of 10:16 a.m. in Paris.

Utilities Slide

E.ON AG, Germany's largest utility, led declines among European power producers in the Dow Jones Europe STOXX Utilities Index, retreating to its lowest in almost 19 years. The shares lost as much as 16 percent to 23.81 euros, the biggest drop since October 1989, and were at 25.38 euros at 10:18 a.m. in Frankfurt.

GDF Suez SA, the owner of Belgium's biggest power producer Electrabel SA, had its biggest drop since starting to trade in July, falling as much as 16 percent to 22 euros. The stock was at 24.08 euros as of 10:19 a.m. in Paris.

To contact the reporter on this story: Fred Pals in Amsterdam at fpals@bloomberg.net