Denbury shares dip on prospects of rising oil output

By Sharangdhar Limaye

BANGALORE, Nov 12 (Reuters) - Shares of Oil and gas explorer Denbury Resources Inc (DNR.N) fell more than 7 percent, as the oil sector as a whole took a beating on the prospect of OPEC raising its output.

Denbury shares were trading at $54.13, down $4.41 percent, in afternoon trade on the New York Stock Exchange.

U.S. oil prices fell $2 Monday after top exporter Saudi Arabia said OPEC would look at raising output to prevent oil prices from touching the $100 mark.

At 1820 GMT, U.S. crude CLc1 was down $1.68 at $94.64 a barrel, after dipping as low as $93.54 earlier in the session. U.S. oil struck a record high of $98.62 a barrel on Nov. 7 as the dollar plunged to new lows and dealers eyed thin stockpiles heading into winter.

"They have been outperforming with oil moving up, up, up. Now that there is a bit of a moderation of oil price, it is reacting," Calyon Securities analyst Carin Kiley said by phone.

It is the most highly levered company among the explorers and producers (E&Ps), she added. Kiley has a "neutral" rating on the stock,

Shares of most of the E&P majors were in red, with Denbury being the biggest loser in the sector.

The broader Dow Jones U.S. Exploration & Production Index .DJUSOS was down about 3 percent at $676.52 in afternoon trade. It had touched a low of $670.19 earlier in the day. (Editing by Anil D'Silva) (Reuters Messaging:sharangdhar.limaye.reuters.com@reuters.net; within U.S. +1 646 223 8780; outside U.S. +91 80 4135 5800))