By Atul Prakash
LONDON (Reuters) - Britain's top equity index edged lower in early trading on Thursday, with energy shares falling the most following a decline in crude oil prices to a four-year low.
The UK Oil and Gas index fell 0.9 percent, the worst sectoral performer, dragged down by a 1.0 to 1.8 percent drop in shares of BG Group, Tullow Oil, Petrofac and Royal Dutch Shell.
Brent crude fell 1.8 percent to $76.36 a barrel as it became increasingly unlikely that OPEC would cut output to support prices during a meeting in Austria on Thursday.
The meeting will be one of the most closely watched in years, with oil prices having sunk 30 percent since June.
"When it comes to OPEC it regularly falls upon Saudi Arabia's shoulders to make a cut, and we have seen no signs of that," Alastair McCaig, market analyst at IG, said.
"Oil companies can't help but react to the spot oil prices as it drills down to their bottom line. Low prices might force companies to alter their production, but demand for oil is quite low anyway."
The blue-chip FTSE 100 index was down 0.2 percent at 6,717.24 points by 0832 GMT after closing flat just below a recent two-month high in the previous session. The index is down 0.5 percent so far this year.
Shares in some leading companies moved following the release of broker notes, traders said.
Royal Mail fell 1.7 percent after Jefferies cut its price target for the stock to 360 pence from 400 pence, while Barclays rose 1.1 percent after Goldman Sachs raised its stance on the stock to "buy" from "neutral" and raised its price target to 300 pence from 272 pence.
Among other sharp movers, mid-cap company Stagecoach rose 6.9 percent after Britain said it would award a contract to run trains between London and Scotland to a Stagecoach and Virgin partnership.
A government department selected the duo over the other two shortlisted bidders, British transport company FirstGroup and a joint venture between Keolis and Eurostar.
FirstGroup shares fell 2.9 percent.
(Additional reporting by Sam Wilkin; Editing by Toby Chopra)