* FTSEurofirst 300 down 0.5 pct, adding to sharp 2-day drop
* $280 bln in market value of oil shares wiped off since June
* Greek shares extend sell-off on political uncertainty
By Blaise Robinson and Sudip Kar-Gupta
PARIS/LONDON, Dec 10 (Reuters) - European stocks fell for a third session in a row on Wednesday, as a further drop in crude prices knocked down the shares of oil majors and oil services groups such as Royal Dutch Shell and Fugro.
Elsewhere, shares in Airbus plunged 10 percent after the aircraft manufacturing group’s new profit outlook disappointed investors, while in Greece the stock market extended losses on mounting worries about the political situation.
Shares in Shell dropped 1.7 percent and Fugro tumbled 12 percent as Brent crude oil slipped below $65 a barrel, hitting a five-year low on rising concerns over demand.
In a monthly report, the Organization of the Petroleum Exporting Countries (OPEC) forecast demand for the group’s oil will drop to 28.92 million barrels per day (bpd) in 2015, down 280,000 bpd from its previous expectation.
“Crude oil is under punishment today once again on the back of the OPEC news. OPEC has cut its demand forecast for next year and this has unbalanced the demand and supply equation further and traders are not liking the sound of this at all,” said Naeem Aslam, chief market analyst at AvaTrade.
Shares of oil services company Saipem shed 5.9 percent, Afren lost 7 percent and Seadrill dropped 2.2 percent.
Brent has plummeted 44 percent since June, forcing a number of oil services companies, including Fugro and Seadrill, to scrap dividends as oil majors accelerate cost-cutting efforts.
The STOXX oil and gas index, home of bellwethers such as BP, Total and Eni, has tumbled 27 percent since June.
The sell-off has wiped $280 billion off market capitalisation of the sector, nearly the size of Israel’s GDP.
At 1545 GMT, the FTSEurofirst 300 index of top European shares was down 0.5 percent at 1,356.88 points. The index has tumbled 3.5 percent so far this week.
However, many fund managers and analysts think that lower oil prices will be positive overall for the equity market in the medium term.
“This is a change in paradigm in terms of energy prices with implications on economic growth and investments. The impact on countries that are net importers and the ones that are net exporters will be quite different,” said Jean Boivin, deputy chief investment strategist at the BlackRock Investment Institute, who has a positive bias on European equities.
Greek shares also featured among the top losers. Athens’ benchmark ATG share index fell 1 percent, adding to a 13 percent slump on Tuesday after the government brought forward a vote on a new president, raising the risk of snap elections if the government fails to garner enough support for its presidential candidate.
Europe bourses in 2014: link.reuters.com/pap87v
Asset performance in 2014: link.reuters.com/gap87v
Today’s European research round-up
Editing by Susan Fenton