The FTSE 100 Index saw hopes of its highest finish in four years extinguished today by news that the United States had stockpiled more oil than traders thought.
BG Group, BP and Royal Dutch Shell were heavily sold during the afternoon after the US added 2.7 million barrels of crude to its inventories last week - or 11% more than a year earlier.
This spelt bad news for the Footsie as the oil and gas sector accounts for a fifth of its value, contributing to the index falling 10 points to 5528.8 by the end of the session.
Traders had earlier taken their cue from signs that mobile phone giant Vodafone was turning around its business in Japan to drive the market ahead by lunchtime.
BG Group and BP ranked among the quartet of heaviest fallers as the oil data from the US surprised analysts who had expected the recent cold snap to put pressure on supplies.
Shares in BG fell 16.5p to 552p and BP weakened 13.5p to 646.5p, while Royal Dutch Shell dropped 22p 1887p.
In contrast, Vodafone cheered 3p to 128.75p to be the largest blue-chip riser as analysts were only expecting a rise of 30,000 customers last month.
It was followed north by HBOS, up 2% or 18.5p to 925p, after becoming the second bank to forecast annual earnings ahead of expectations yesterday.
The positive sentiment boosted rivals HSBC – up 3p to 928.5p – and Alliance & Leicester and Lloyds TSB, ahead 9p to 942.5p and 2.75p to 485p respectively.
But news was less positive elsewhere in the banking sector, as Standard Chartered and Barclays headed in the opposite direction as their latest updates failed to impress the market.
Shares in Standard Chartered were off 38p to 1215p as brokers noted the language used in its pre-close statement today was less bullish than a year ago.
Barclays slipped 0.5p to 603p after it shook up the management of its UK banking operation.
Analysts said the departure of Barclays UK banking boss Roger Davis was negative because there were signs that his efforts to turn around performance were working.
British Airways rose 6.5p to 334.25p after recent figures showed passenger numbers had grown and budget airline easyJet today reported that it carried 8.3% more passengers last month than a year ago. Shares in easyJet were up 6.75p to 358p.
Outside the top flight, engineer Mowlem agreed to be taken over by rival Carillion for £291 million but its shares unchanged at 208p as the price was less than investors were expecting. Carillion was on the slide – off 16p at 300p.
Stagecoach was down 6% or 7p at 116.25p after the company today suggested it is not in active discussions on the two remaining rail franchises to be renewed in 2005, Thameslink and Great Northern and Greater Western.
But packaging specialist DS Smith added 13.5p to 165.5p as it had already prepared investors for a fall in half-year profits.
The biggest Footsie risers were Vodafone up 3p at 128.75p, HBOS ahead 18.5p at 925p, British Airways up 6.5p at 334.25p and Antofagasta ahead 33p at 1738p.
The biggest fallers were Standard Chartered down 38p at 1215p, BG Group off 16.5p at 552p, Compass Group down 4.75p at 214p and BP off 13.5p at 646.5p.