Kleinwort Benson, the investment house, did much of the damage, cutting its forecasts for the crude price from dollars 17 to dollars 14 a barrel for this year and from dollars 17.5 to dollars 16 for next.
If Kleinwort's crystal ball is giving the right picture, the oil groups are in for an agonisingly tough time.
The market's gloom deepened as the conviction grew that the next Opec meeting, likely to be held in March, will make little, if any, progress in capping the over- production that is causing much of the industry's discomfort.
To add to the catalogue of woe, three securities firms turned negative on Enterprise, fretting about the dividend and urging clients to sell the shares.
In such a climate last week's enthusiasm generated by the US cold spell was conveniently forgotten and the sector suffered a sharp setback.
Enterprise, hit by Hoare Govett, Nomura and Societe Generale Strauss Turnbull, was at one time down 16.5p to 459.5p. The shares closed at 463p.
British Petroleum fell 6p to 368.5p; Burmah Castrol 7p to 841p and Shell 11p to 726p. Lasmo lost 4p to 122p.
Mining shares were also in the doldrums, with the recent high-flyer RTZ retreating 16p to 853p. Coal Investments, another to make impressive headway, lost 5.5p to 50.5p. But Lonrho, following profits, board changes and a property revaluation, improved 8p to 153p.
The rest of the market had a dismal session, with some profit-takers unable to resist the temptation to reap their rewards.
But at least two portfolio trades, seemingly heavily weighed towards sales, and futures trading were significant influences in sending the FT-SE 100 index down 37.4 points to 3,444, the biggest fall for two weeks.
A weak German bond market and a poor New York opening were other factors cited for the deterioration which, however, left the index only 40.2 from its peak.
The confident undertone was highlighted by the relative strength of the supporting FT-SE 250 index, down 9.8 at 4,091.1.
Trading was again busy with turnover nearing one billion shares.
Boots had an eventful session. At one time up 12p, the shares closed 1.5p higher at 563p. Reports that it planned to sell its drug operation helped sentiment. So did stories that its half-owned do-it-yourself chain, Do-it-All, may sell stores to J Sainsbury.
The stockbroker Panmure Gordon was also active, maintaining a confident stance after meeting the company. The broker believes Boots is trading well and the shares are undervalued.
Sainsbury fell 14.5p to 443p as some followed advice to switch into Tesco, down 5.5p to 232p.
MFI, interim figures tomorrow, fell 3.5p to 172.5p as Barclays de Zoete Wedd said sell.
Arjo Wiggins Appleton, the packaging group, made a muted response to Hoare support and indications that BZW is about to upgrade. The shares rose 1p to 277p.
Media stocks again attracted attention. Pearson, despite talk of a big line on offer, seemed to draw comfort from a buy recommendation, thought to be from Henderson Crosthwaite, and ended 11p higher at 655p. US buying helped Reuters 28p up at 1,933p.
Suggestions that General Electric Co was planning sell-offs left the shares little changed at 336.5p. Alvis gained 4p to 46p.
Electricities made headway, with Seeboard, despite its one-for-one share bonus, surprisingly outpacing the rest with a 12p gain to 399p.
Profit warnings hit Berry Birch & Noble, the financial planning group, down 30 at 155p, and the opticians Specialeyes, off 2p at 14p.
First Leisure enjoyed a UBS push, up 7p at 344p and Millwall held at 4.5p as Portuguese interests lifted their stake to 12.49p by selling a property company to the football club.
Emerald Energy scored the day's best gain, up 33.3 per cent to 3p.
But Rhino, the video games retailer which brushed 70p, suffered the sharpest reverse, falling 6p to 39p against a recent 44p rights price. The shares have been unsettled by the Dixons results, although Rhino reported encouraging Christmas trading. Results are due in March.
The FT-SE 100 index tumbled 37.4 points to 3,444 and the FT-SE 250 index lost 9.8 to 4,091.1. Turnover was 984.9 million shares from 38,411 deals. The account ends on Friday with settlement on 7 February. Gilts were relaxed ahead of today's pounds 2.75bn auction.
John Lusty, the little food group, made an impressive stock market return, closing at 13p in brisk trading. The shares were suspended at 6.5p last month while the group undertook the reverse takeover of Trustin-Kerwood, a supplier of speciality foods. The deal, worth pounds 3.6m in shares, has left the Wilson family with three boardroom seats and the majority shareholding.
There is growing speculation that Independent Insurance Group is the likely target for Union des Assurances de Paris, the acquisitive soon-to-be privatised French group which wants to expand in Britain. Independent came to the stock market at 225p a share late last year. It is thought to have had approaches before the flotation. The shares rose 7p to 308p.
Scottish Heritable, a conglomerate which once embraced a wide range of companies, has agreed a refinancing plan with its bankers which is being 'formalised'. Roger Shute, who quit BM Group because of ill health, remains chairman but has handed over as chief executive to Brian Craig. Scottish shares were suspended in November at 5p. In 1987 they peaked at 293p.Reuse content