Weak oil stocks BP and Shell dragged Britain's FTSE index to a fresh three month low today amid worries about fuel refining margins and concern the possible ending of the Venezuela strike could hurt prices.
News that oil tanker pilots had ended their strike in a key Venezuelan export area dented crude oil prices, as it threatened to increase the flow of crude oil, especially to America.
BP, which caused concern about refining profitability earlier this month, lost 1.1 per cent while Shell dipped 1.8 per cent.
At 15.15 p.m. the FTSE 100 index was down 29.5 points, or 0.8 per cent, at 3,749.8.
The index failed to re-establish a base above the 3,800 level after briefly bouncing to 3,185 earlier and looked set to register a loss for the seventh consecutive session.
Early weakness on Wall Street after Monday's closure for Martin Luther King day further unsettled sentiment.
But stronger telecoms firms BT and Vodafone helped take up some slack after investment bank Merrill Lynch issued a positive note on the sector.
Shares in mobile phones group Vodafone climbed 0.6 per cent after Merrill Lynch raised its rating on the company to "buy" from "neutral".
BT Group topped the blue-chip risers with a 2.2 per cent gain after Merrill Lynch repeated its "buy" rating on the stock, saying it expected BT to benefit from cuts to its operating costs and capital expenditure.
Also on the upside, shares in plumbing merchants Wolseley rose 1.7 per cent, while building materials firm Hanson gained 1.5 per cent, buoyed by a surprise jump in U.S. housing starts in December. Both firms have exposure to U.S. markets.