LONDON (MarketWatch) — U.K. stocks dropped Thursday, with oil and gas shares leading decliners after oil prices were dragged to fresh multiyear lows.
The FTSE 100 UKX, -0.71% fell 0.8% to 6,771.53, with the oil and gas group losing more than 3%. U.S. oil futures CLH5, -0.20% sat at their worst level since March 2009, with a sharp drop in prices triggered Wednesday after a larger-than-expected increase in U.S. crude supplies. Brent crude-oil prices LCOH5, +0.23% were slightly lower Thursday after losing 2.3% in the previous session.
Shares of oil major Royal Dutch Shell PLC RDSB, -3.47% RDS.B, -3.91% were at the bottom of the FTSE 100 as they dropped 4.2%. Shell was able to post a rise in fourth-quarter profit on a current cost-of-supplies basis — a metric similar to the net profit reported by U.S. oil companies — in the face of falling oil prices. That profit rose to $ 4.2 billion, compared with $ 2.2 billion in the same period last year. But Shell also plans to reduce capital expenditure by about $ 15 billion over the next three years.
Meanwhile, Diageo PLC DGE, +1.40% shares were off 0.6% after the world’s largest liquor company said first-half profit fell 18%, with sales in North America dropping. Diageo’s brands include Smirnoff, Guinness and Johnnie Walker.