Oil prices fall as Opec mulls production hike

Oil shares weighed on the stock market in london yesterday as the price of crude fell to its lowest level for ten months.

North Sea producer Harbour Energy fell 8.5pc, or 27.9p, to 299.5p, and global giants BP (down 3.8pc, or 17.9p, to 458.15p) and Shell (down 3.1pc, or 72p, to 2272.5p) were also on the slide.

The sell-off came as the price of oil was sent tumbling by concerns about Covid lockdowns in China and reports that Saudi Arabia and other Opec producers are discussing an output increase.

Brent crude fell more than 5pc to below $83 a barrel for the first time since January before clawing back some of its losses.

Motorists will be hoping this leads to lower prices at the pumps, while any drop in inflation will also be welcomed.

But the slide dragged the FTSE 100 down 0.12pc, or 8.67 points, to 7376.85 on a slow start to the week in london. The FTSE 250 fared better, rising 0.68pc, or 130.3 points, to 19,413.35. Michael Hewson, chief market analyst at CMC Markets UK (flat

at 232p), said: ‘it’s been a lacklustre start to the week, for markets in Europe, after an Asia session which was dominated by concern that Chinese authorities will have to implement further lockdowns, after the country reported its first Covid related deaths since April.

‘Consequently, we’ve seen sharp declines in the price of crude oil and base metals on concerns over weaker demand, which has acted as a drag on the basic resources and the energy sector.’

Compass, the world’s largest catering group, was also on the slide yesterday despite an upbeat set of results.

The company said a 37.5pc rise in revenues to £25.8bn in the 12 months to the end of September took them back above Covid levels. Profits more than tripled from £464m to £1.5bn.

Compass operates in 40 countries and has 500,000 staff including 50,000 in Britain where it works in school, university and office canteens as well as at sporting events such as Wimbledon.

The company said it was ‘significantly disrupted’ by Covid but has ‘recovered well and learned from the pandemic’.

Compass announced a £250m share buyback programme having completed a £500m repurchase scheme.

The company also hiked its annual dividend payment by 125pc, meaning shareholders will pocket 31.5p a share. But shares fell 1.4pc, or 26.5p, to 1824p.

Diploma inched up 2.6pc, or 74p, to 2874p following a year of successful takeovers.

The technical products supplier hailed its seven ‘ strategically important acquisitions’ over the year, including the Australian business Anti-Corrosion Technology (ACT), at a cost of £187m. Diploma’s revenue soared by 29pc to £1bn in the year to September and its profit rose to £129.5m in the period, up from £96.6m a year earlier.

The group’s results saw RBC raise the target price to 2700p from 2450p.

insurance giant Beazley gained 3.3pc, or 20.5p, to 643.5p after Berenberg and Morgan Stanley raised its target price.

Over at Keywords Studios, the video games developer enjoyed a positive second half of the year thanks to the strong dollar.

The group now expects its profit and revenue for the year to be ‘comfortably ahead’ of what analysts had predicted.

Keywords said its revenue of £586m will be ahead of the market range of £549m to £581m, while a profit of more than £96m is on course to exceed estimates of £84m to £91m.

The group also expects its results for next year to be at the top end of analyst expectations. Shares rose 2.4pc, or 64p, to 2774p.