European shares close flat after late recovery

LONDON, Nov 28 (Reuters) - European erased their losses in late trade to close flat on Friday as heavy falls in energy stocks, hit by a slump in oil prices, were offset by gains for consumer companies.

The pan-European FTSEurofirst 300 index provisionally closed flat at 1,392.82 points after trading as low as 1,384.58 points in early trade.

Oil companies such as Statoil (Xetra: 675213 - news) , Galp Energia and explorer Premier Oil (LSE: PMO.L - news) fell by between 5.4 percent and 14.7 percent after Brent slipped below $72 following OPEC's decision on Thursday not to cut output, a move investors said would leave oil markets heavily oversupplied.

But the prospect of lower fuel prices boosted airlines and companies which depend on consumer spending. Shares (Frankfurt: DI6.F - news) in Air France surged 6.7 percent while consumer goods group Henkel (Xetra: 604840 - news) rose 1.9.

The tobacco sector was boosted by mergers and acquisitions speculation after Bloomberg reported Swedish Match AB (Other OTC: SWMAF - news) and Skandinavisk Holding, the owners of Scandinavian Tobacco Group, are in talks with private-equity firms about a possible sale of the cigar maker.

Swedish Match's shares rose 5.1 percent, with Imperial Tobacco up 2.5 percent. (Reporting By Francesco Canepa; Editing by Alistair Smout)