LONDON, Nov 28 (Reuters) - European erased their losses in late trade to close flat on Friday as heavy falls in energy stocks, hit by a slump in oil prices, were offset by gains for consumer companies.
The pan-European FTSEurofirst 300 index provisionally closed flat at 1,392.82 points after trading as low as 1,384.58 points in early trade.
Oil companies such as Statoil, Galp Energia and explorer Premier Oil fell by between 5.4 percent and 14.7 percent after Brent slipped below $72 following OPEC's decision on Thursday not to cut output, a move investors said would leave oil markets heavily oversupplied.
But the prospect of lower fuel prices boosted airlines and companies which depend on consumer spending. Shares in Air France surged 6.7 percent while consumer goods group Henkel rose 1.9.
The tobacco sector was boosted by mergers and acquisitions speculation after Bloomberg reported Swedish Match AB and Skandinavisk Holding, the owners of Scandinavian Tobacco Group, are in talks with private-equity firms about a possible sale of the cigar maker.
Swedish Match's shares rose 5.1 percent, with Imperial Tobacco up 2.5 percent. (Reporting By Francesco Canepa; Editing by Alistair Smout)