Crude futures stabilize above $74 after falls, oil and gas stocks hold steady in London

Oil prices firmed this morning after falling heavily after sharp declines in the US and Asian markets, which absorbed a heavy hit from US president Barack Obama’s proposals to curb risk taking in the banking sector by placing limits on trading activity, which could potentially cut profits at major banks, while more signs of a tightening monetary policy came out of the world’s second largest energy consumer China.
The Chinese government has reportedly told banks to stop lending until the end of the month in its latest move to tighten monetary policy last week after upping the reserve requirements for banks by 0.5% to 15% of their deposits following an increase of bank-reserve ratios and interbank rates, both of which occurred earlier this month, to curb economic activity and prevent the economy from overheating.
In London, Brent Crude for March delivery improved to US$73.36/barrel, while US light, sweet crude rose to US$74.81/barrel on the New York Mercantile Exchange.
Investors will now be looking for cues in the Fed’s interest rate announcement that is expected on Wednesday and today’s existing home sales update.
Major oil and gas stocks didn’t show much movement early in the day. Supemajors BP (LSE: BP) and Shell (LSE: RDSB) remained unmoved, as did fellow FTSE 100 constituent BG Group (LSE: BG), while Tullow Oil (LSE: TLW) rose marginally and another blue chip Cairn Energy (LSE: CNE) lost less than 1%.
Engineering companies Amec (LSE: AMEC) and Petrofac (LSE: PFC) posted small gains.
Midcaps followed the trend and were little moved by early afternoon with the exception of Melrose Resources (LSE: MRS), which slipped 5.5% on no news. Dana Petroleum (LSE: DNX) and Salamander Energy (LSE: SMDR) also were in the red, posting small losses.
Dragon Oil (LSE: DGO) and JKX Oil & Gas (LSE: JKX) were flat, while Premier Oil (LSE: PMO) and Soco International (LSE: SIA) rose marginally. Heritage Oil (LSE: HOIL) took the lead with a 1.5% advance.
Services companies Wood Group (LSE: WG) and Wellstream Holdings (LSE: WSM) moved along, gaining less than 1%.
Atlantic Canada operating oil and gas group Enegi Oil (AIM: ENEG), EU operating Rome-based oil junior Mediterranean Oil & Gas (AIM: MOG) and Africa and FSU operating oil and gas junior Victoria Oil & Gas (AIM: VOG) led the juniors with gains of 9.5%, 5% and 3.5% respectively.  http://www.proactiveinvestors.co.uk/companies/news/12572/crude-futures-stabilize-above-74-after-falls-oil-and-gas-stocks-hold-steady-in-london-12572.html