Shares in some of Australia's largest listed energy companies on Wednesday tumbled to their lowest level in more than six months amid rising investor fears of a continuing glut in the global oil market.
By 1445 AEST, shares in Woodside Petroleum were down 2.1 per cent to $29.29 - an eight month low; Santos was down 2.2 per cent to $2.92, its lowest level in 16 months; rival Oil Search had lost 2.1 per cent to reach $6.51, an eight-month low; while gas exporter Origin Energy fell three per cent to $6.78, a three month low.
The local slide was prompted by similar falls in energy stocks in US and European markets overnight, after a renewed slump in oil prices to seven month lows on news of increased supply from several key producers.
That production hike undermined OPEC-led attempts to support the market through reduced output.
"There is emerging skepticism, finally, that the OPEC production cuts are not going to be an instant fix and that US shale production is filling the gaps," Patersons strategist Tony Farnham said.
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Data on Tuesday showed steady compliance on output cuts among OPEC producers but U.S. crude stockpiles dropped slightly more than forecast.
But investors continued to discount the OPEC data, indicating the lack of confidence market participants have in the organisation's efforts to shore up prices.
"Even with OPEC compliance above the agreed targets, US inventories are not falling as fast as expected. That screams lack of efficacy for OPEC cuts," AxiTrader chief market strategist Greg McKenna said.
By 0345 GMT (1345 AEST), benchmark Brent crude prices slipped another 11 cents, or 0.2 per cent, to $45.91 a barrel.
The slide in local energy stocks weighed on the benchmark stock index, with the S&P/ASX200 down 91 points, or 1.58 per cent, at 5,666 points, by 1445 AEST.
Shares in resources giant BHP Billiton, which owns a substantial petroleum business, slid 3.8 per cent to $22.10, their lowest level in eight months.
