LONDON (CNN) - European bourses closed sharply lower Wednesday, led by oil stocks after the price of crude fell to a 14-month low.
Brent crude futures for September delivery fell 58 cents to $24.31, extending the previous session's losses on London's International Petroleum Exchange in late trading as U.S. oil inventories rose unexpectedly.
"It is too early to blame the restart of Iraqi oil shipments for the gains (crude stocks), but implies that gains may be larger in the weeks ahead," Lawrence Eagles, an oil analyst at GNI, wrote in a note to investors.
Iraq halted oil supplies June 4 in a dispute with the United Nations over the terms of an oil-for-food program, before turning the tap back on in early July. The latest rise in inventories signals that U.S. consumption is tailing off.
British oil giant BP (BP-), the world's third-largest publicly traded oil company, fell 3.4 percent in London. Royal Dutch Shell, the No. 2 world player, dropped 3.8 percent.
Shell Transport and Trading (SHEL), which owns 40 percent of Royal Dutch, was down 3.9 percent in London and TotalFinaElf (PFP) declined 4.9 percent in Paris, topping the loser board.
London's FTSE 100 index fell 0.4 percent to 5,404.6, with mining stocks among the biggest fallers after platinum and palladium prices fell amid speculation Russia, a major supplier, would renew deliveries to Japan, reducing demand from other producers.
Anglo American (AAL), which own half of the world's top platinum producer, fell 5.3 percent and rival Rio Tinto (RIO) dipped 2.1 percent.
Technology and telecom stocks were having a mixed session. Telewest Communications (TWT), Britain's second-biggest cable TV operator, plunged 13.4 percent on concern about its debts and the valuations of cable companies in general.
In Paris, the CAC 40 blue chip index fell 111.04 points, or 2.2 percent, to 4,867.5, with Suez (PLY), the world's second-largest water utility, the third biggest decliner, down 4 percent and heavyweight France Telecom (PFTE), the second-biggest faller, sliding 4.7 percent.
Franco-German drugmaker Aventis (PAVE) fell 2.1 percent, extending the previous day's losses on disappointment over a delay in filing for marketing approval of a new inhaled insulin.
Renault (PRNO), France's biggest automaker, lost 3.1 percent after Nissan Motor's President Carlos Ghosn said he expects the U.S. auto market to stay relatively flat over the next three years. Renault owns at 37 percent stake in Nissan.
Frankfurt's late-trading Xetra Dax lost 114.09 points, or almost 2 percent, to 5,732.57, with the world's third-largest automaker DaimlerChrysler (FDCX) sliding 2.4 percent ahead of its earnings report Friday.
Volkswagen (FVOW), Europe's biggest automaker, slid 2.3 percent as Ford (F: Research, Estimates) of the U.S. posted a big second-quarter loss, hurt by costs of replacing 13 million Firestone tires.
ASML, the world's largest semiconductor equipment maker, bounced around in and out of negative territory after reporting a first-half loss in line with expectations. It finished in positive territory up just 0.3 percent in Amsterdam, where the AEX index was 1.4 percent lower at the close.
The SMI in Zurich was down 0.8 percent and Milan's MIB30 dipped 1.2 percent.
The pan-European FTSE Eurotop 300, a broader index of the region's largest stocks, was 1.1 percent lower, with the mining, auto and oil and gas sub-indexes all in negative territory.
U.S. stocks Wednesday at midday fell on renewed concern about lagging earnings and weak sales. Intel's revenue forecast, generally within the range of expectations, nevertheless caused analysts to lower their opinion of the company, casting a pall on the technology sector.
The Dow Jones industrial average slipped 0.7 points, or 0.6 percent, to 10,536.97, while the Nasdaq composite index dipped 38.08, or 1.8 percent, to 2,029.24.
All eyes were on U.S. Federal Reserve Chairman Alan Greenspan's twice-yearly testimony to Congress, at which he said the world's biggest economy still is weak and may need to cut rates again.
In the currency markets, the euro strengthened to a two-month high against the U.S. dollar, amid expectation the latest inflation figures for the euro zone signaled the European Central Bank may cut rates this summer.
The euro was last trading at 86.92 U.S. cents compared with 85.95 cents in late New York trade Tuesday.
"The fundamentals show that growth is slowing and inflation has peaked and it is on the way down. We expect a cut before their summer break," Joanne Collins, an economist at Daiwa SCBC Europe, told CNN.
Euro zone consumer price inflation dropped to 3 percent year-to-year in June after hitting an eight-year high of 3.4 percent in May, the European Union's statistical agency said. 
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