By Carla Mozee, MarketWatch Economists downgrade inflation view, ECB poll shows

LONDON (MarketWatch) -- European stocks finished Thursday's session with strong gains, though oil and gas shares came under pressure as oil prices extended losses to multiyear lows.

The Stoxx Europe 600 index closed up 0.2% to 335.86, as all sectors except for oil and gas group finished higher, according to FactSet data.

Oil issues fell as Brent crude tumbled below $79 a barrel on London's ICE Futures exchange, trading at its lowest level in four years. Prices continued to fall after Saudi Arabia's Oil Minister Ali al-Naimi on Wednesday said the international oil market and Saudi oil policy have been subject to wild and inaccurate conjecture in recent weeks, but policy has remained constant in the past few decades and hasn't changed recently.

December Brent crude fell $1.80, or 2.2%, to $78.66 a barrel in Thursday afternoon dealings.

"Brent crude seems unable to cope with mounting troubles in the oil sector, with the volatile Ukraine/Russia situation, the continued troubles in the Middle East alongside overproduction, lower demand and Saudi Arabian price undercutting, all continued to spook investors, with no sign of oil rallying any time soon," said Connor Campbell, financial analyst at SpreadEx in a Thursday note.

In the oil group, shares of Tullow Oil dropped 5.8%, Repsol SA shed 1% and Total SA (TOT) dropped 0.9%. BP PLC gave up 0.9% and Royal Dutch Shell PLC lost 2.1%. See more European movers.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in December (CLZ4) dropped more than 2% to $75.31 a barrel, falling further after a weekly U.S. report showed a surprise increase in gasoline supplies by 1.8 million barrels.

Among country indexes, France's CAC 40 index rose 0.2% to 4,187.95, and Germany's DAX 30 index gained 0.4% to 9,248.51. The U.K.'s FTSE 100 rose 0.4% to 6,335.45.

Inflation woes: A survey of economic forecasters conducted by the European Central Bank showed they expect, on average, inflation to grow just 0.5% this year, down from a September forecast of a 0.7% rise. The inflation rate in 2015 should come in at 1%, and at 1.4% in 2016.

The rate expectations lag behind the ECB's inflation target of just below 2% over the medium term. Also, economists expect growth in gross domestic product of 0.8% this year, lower than the 1% projection posted in September.

Earlier Thursday, France's statistics agency said the country's consumer price index was unchanged in October from September. France has said low inflation is among the reasons why it won't meet its deficit reduction targets. In Germany, the federal statistics agency confirmed that the annual rate of inflation was at a low reading of 0.7% in October and prices fell 0.3% on the month.

European Central Bank President Mario Draghi's plan to buy asset-backed securities in an effort to help revitalize economic growth was met by opposition from Bank of France Governor Cristian Noyer and Bundesbank President Jens Weidmann, noted Joshua Mahony, research analyst at Alpari UK, on Thursday.

"However, we have since seen a gradual [inflation] deterioration across both countries and the continuation of this would likely mean a diminished degree of opposition to ECB easing in the future," said Mahony. Any move lower in CPI readings from the countries "would surely lead to a softening of their respective stance as the need for stimulus to gain traction in prices is increasingly needed."

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