Norway's fund divestment proposal sends European oil index to one-month low

MILAN, Nov 16 (Reuters) - Europe's oil and gas index hit its lowest level since mid-October on Thursday after Reuters reported that Norway's trillion-dollar sovereign wealth fund had proposed to drop oil and gas companies from its benchmark index.

The deputy central bank chief supervising the fund said if approved the proposal would mean cutting its investments in oil and gas companies which currently represent 6 percent - or around $37 billion - of its benchmark equity index.

At the end of 2016, the fund held stakes of 2.3 percent in Royal Dutch Shell (LSE: 0LN9.L - news) , 1.7 percent of BP, 0.9 percent of Chevron (Euronext: CHTEX.NX - news) and 0.8 percent of Exxon Mobil (Swiss: XOM-USD.SW - news) . It also held stakes in Italy's Eni (LSE: 0N9S.L - news) , France's Total (LSE: 524773.L - news) and Sweden's Lundin Petroleum (LSE: 0NNR.L - news) .

Europe's oil and gas index was down 0.35 percent by 1332 GMT. The index has recovered from its summer lows on the back of rising crude prices but it remains down 5 percent year to date and is among the worst sectoral performers in Europe. (Reporting by Danilo Masoni, Editing by Helen Reid)