Large oil and gas companies such as Shell, TotalEnergies and BP were among the losers on the European stock exchanges on Tuesday. The uncertainty about the oil price made investors nervous. Previously, the oil cartel OPEC and allies (OPEC+) countries failed to reach new agreements on production restrictions.
This initially caused higher oil prices, but then uncertainty set in. Concerns about the spread of the Delta variant of the coronavirus also put pressure on sentiment on the stock exchange floors.
Shell was previously one of the strongest climbers in the AEX index Amsterdam. However, the company closed the session with a loss of 2 percent. TotalEnergies lost 2.4 percent in market capitalization in Paris, and BP lost almost 4 percent in London.
Failure to reach an agreement could put further pressure on the already tight market, likely leading to significant price increases. But it can also fall the other way. If OPEC+ breaks down, it could be every man for himself, with countries flooding the markets with oil. This could cause prices to crash, just like a year earlier.
After it became known that OPEC+ did not come to new agreements, the oil price rose sharply, but the price fell again during the session. A barrel of American oil cost 2.2 percent less at the closing bell at $73.55, and Brent oil became 3.2 percent cheaper at $74.73.
Steel group ArcelorMittal was the strongest faller in the AEX closing bell with a loss of more than 5 percent. In the MidKap, metal specialist AMG was the biggest loser with more than 4 percent loss. Other European steel groups such as the German ThyssenKrupp and the Finnish Outokumpu also lost market value.