European markets struggled to end on a positive note Thursday as a sharp fall in oil prices weighed on sentiment, following news that OPEC would be extending its production cuts.
The pan-European Stoxx 600 failed to hold onto gains, closing 0.06 percent down in what had been a choppy trading session. Sectors finished mixed to lower, however, households goods and financial services closed with solid gains.
Despite posting solid gains in early trade, oil came under sharp pressure after an OPEC delegate told reporters in Vienna that oil production would be cut for an additional nine months in a bid to stem a supply glut and boost struggling oil prices. At the European close, Reuters reported citing OPEC delegates, that non-OPEC producers had also agreed to join OPEC in extending production cuts.
The news dampened sentiment, as some investors' had hoped that the group might reduce output even more. Shortly after Europe's market close, oil prices hit fresh session lows, with Brent crude oil slumping to $52.98 at 4.30 p.m. BST before extending losses, while U.S. WTI hit $50.28 before going below $50 after the close.
Oil and gas stocks sank 1.19 percent by the close, with Amec Foster and Tullow Oil falling more than 3.5 percent each. Meanwhile, U.K. producer Petrofac finished off its lows but tanked 29.95 percent. This was primarily due however to an investigation by the U.K.'s fraud regulator into allegations of corruption and bribery. Its Chief Operating Officer Marwan Chedid has been suspended.