EUROPE MARKETS: Energy Stocks Weigh On European Markets, But Athens Gains On Greek Move

By Carla Mozee, MarketWatch

Greece submits loan-extension request

LONDON (MarketWatch) -- European stocks dropped Thursday, with energy shares under pressure as oil prices tanked on an unexpectedly strong surge in supplies.

But the markets benchmark also came off its lows on reports Greece has formally asked for a loan extension.

The Stoxx Europe 600 was down 0.3% to 379.25. The oil and gas group lost nearly 2% as crude-oil futures (CLH5)fell more than 4%, to below $50 a barrel. The slide came after data released late Wednesday showed weekly U.S. crude supplies jumped 14.3 million barrels, according to the American Petroleum Institute. Analysts polled by Platts had forecast an increase of 3.1 million barrels for the week.

Among the energy-related stocks trading at the bottom of the Stoxx 600, deepwater driller Seadrill Ltd. dropped 4.5%, exploration and production company Premier Oil PLC fell 2.9% and Norway's Statoil ASA lost 2%.

Shares of oil producer Tullow Oil PLC were down 2.6%, a move that also weighed on the U.K.'s FTSE 100, which lost 0.3% to 6,876.13. A 7.9% fall in Centrica PLC shares also hurt the British benchmark, after a downbeat financial update from the parent company of British Gas.

On the other major European benchmarks, Germany's DAX (DAX) shed 0.2% to 10,941.81, and France's CAC was down 0.2% to 4,791.31.

Greece's Athex Composite outperformed the broader market as it rose 1.1% to 856.79. The index held its gain after reports that Greece has submitted a request for an extension to its current loan from its European creditors, confirmed by Eurogroup President Jeroen Dijsselbloem in a post to Twitter.

Gains for the euro (EURUSD) accelerated after the news, trading at $1.1436, compared with $1.1398 late Wednesday.

Greek Finance Minister Yanis Varoufakis said talks with creditors are showing signs of progress. "We are on the right track, the consultations show all the signs of an agreement," Varoufakis said on Wednesday. "If the climate holds, on Thursday we will have a positive outcome at a technical level, and by Friday, a formal approval of the Greek position."

The European Central Bank on Wednesday approved funding of EUR68.3 billion ($77.8 billion) to Greece's banks through an emergency credit facility

Greek banking stocks traded higher, with Eurobank Ergasias SA and Piraeus Bank SA each up 2.5%.

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