Shell and BP shares soar as oil hits a 7-year high
Oil majors Shell and BP hit fresh post-pandemic records as crude prices reached their highest levels in just over seven years.
Shell was up 1.5pc, or 28.4p, at 1873.8p while BP rose 0.5pc, or 2p, to 395.75p – their highest levels since February 2020. The gains came as prices of Brent Crude passed $88 a barrel, for the first time since October 2014.
Another oil benchmark, West Texas intermediate, was also trading at around a seven-year high close to $86 a barrel.
The latest surge followed an attack by rebels in Yemen against the United Arab Emirates, which raised fears of supply disruption.
Tensions were increased further when neighbouring Saudi Arabia launched air raids in Yemen in retaliation.
Brent’s rally means it has risen around 60pc in the last 12 months and over 350pc since April 2020, when its value plunged to just under $20 a barrel.
Some analysts, including Goldman Sachs, have predicted that the prices of oil could climb back to $100 a barrel this year as the perceived threat of Omicron diminishes, allowing the global economy to reopen and kick-start demand for fuel.
The world’s oil market is also facing a supply squeeze unless the OPEC+ group of oil-producing countries, such as Russia and Saudi Arabia, decide to open the taps to meet demand at the risk of prices falling back again.
Political instability is adding upward pressure to oil prices, with the Yemen conflict and rising tensions between Russia and Ukraine worrying energy markets.
The FTSE 100 dropped 0.6pc, or 47.68 points, to 7563.55 while the FTSE 250 fell 1pc, or 218.93 points, to 22,652.71. Markets in london were under pressure after rising to a two-year high on Monday, with some traders looking to take profits following the rally.
Miners also weighed on the index amid weaker commodity prices, with Russian group Evraz, which is part-owned by Chelsea owner Roman Abramovich, dropping 2.8pc, or 15.8p, to 557.2p while precious metals group Polymetal fell 1.9pc, or 21.5p, to 1132.5p.
GlaxoSmithKline shares fell 0.4pc, or 6.6p, to 1701.2p, as it emerged that it is in talks with the sovereign wealth funds of Qatar and Singapore to fend off Unilever’s takeover efforts.
Cybersecurity group Darktrace inked a multi-million dollar deal to provide its artificial intelligence technology to one of the world’s largest airlines.
The airline, which operates around a thousand flights each day to over 100 destinations, will use Darktrace tech to protect the business from ‘sophisticated’ threats. Darktrace rose 5pc, or 20.6p, to 433.8p.
Mid-cap oil and gas firm Energean jumped by 3.7pc, or 33.5p, to 949.5p after a record performance in 2021. The firm noted that record gas prices in italy, one of its key markets, and better than expected production helped lift its revenues to £364m, up from £247m in 2020.
Telecoms giant BT was up 3.1pc, or 5.55p, to 186.6p after analysts at Goldman Sachs added it to their ‘conviction buy’ list and raised their target price on the stock to 270p from 180p.
Stock trading platform Plus 500 bounced up 2.3pc, or 32.5p, to 1470p after it was granted a tax cut by the israeli government.
its status as a ‘preferred technological enterprise’ has been extended and as a result, its annual corporation tax rate will be lowered to 12pc from 23pc.
Retirement income and pension specialist Just Group surged 8.2pc, or 7.1p, to 93.3p after its sales jumped 25pc to £2.7bn during 2021.