Canadian oil stocks battered by financial woes

CALGARY, Alberta (Reuters) - Canadian energy stocks appeared headed for their biggest one-day drop in seven years on Monday as oil and gas prices skidded due to the widening world financial crisis.

Led by such big names as Canadian Natural Resources Ltd (CNQ.TO: Quote) and Suncor Energy Inc (SU.TO: Quote), the Toronto Stock Exchange oil and gas subgroup tumbled 7 percent, or 22.93 points, to 310.41.

That represented an eight-month low for the sector, and made it the biggest loser on the TSX as the broader composite index .GSPTSE sank 465 points.

The fall came against the backdrop of a 6 percent drop in oil prices to just above $100 a barrel and a 5 percent drop in natural gas to $7.24 per million British thermal units.

"The worldwide uncertainty in financial markets is gaining momentum with every passing day," said FirstEnergy Capital Corp analyst Martin Molyneaux. "But to take close to 7 percent out of the marketplace in an hour and a half of trading seems more than a little bit ridiculous."

He said his firm is telling clients that the falling stocks represent a buying opportunity for investors with cash and some courage, as energy-market supply and demand fundamentals have not changed dramatically.

"But bids are evaporating left, right and center," Molyneaux said. "What we think needs to happen is the big caps themselves need to show some value discipline and start buying back their own stock."

Among the big losers on Monday, Canadian Natural was off nearly 10 percent at C$72.89, Suncor was off 7 percent at C$43.16, Nexen Inc (NXY.TO: Quote) was off 8 percent at C$23 and EnCana Corp (ECA.TO: Quote) was off 6 percent at C$66.82.

($1=$1.04 Canadian)

(Reporting by Jeffrey Jones; editing by Rob Wilson)