Drillers and miners rise as oil hits 18-month high
COMMODITIES stocks soared as the first global oil pact in 15 years was made, sending the price of the black stuff to an 18-month high.
The price of oil had already increased significantly in recent weeks after the oil cartel Opec agreed to cut production of the fuel by 1.2m barrels a day.
Now it has emerged that 11 oil producing countries which are not Opec members, including Russia, Mexico, Azerbaijan and Oman, have struck their own deal to cut output by 558,000 barrels a day.
It is hoped the move should help reduce the oversupply of oil on the market which has caused the price to crash.
Fawad Razaqzada, technical analyst at Forex.com, said: ‘Make no mistake about it, this historic agreement is a game changer. Although the crude oil rally started at the end of last month when Opec first announced the deal, I think there is plenty of fuel left in this rally.’
The deal sent the oil price up by as much as 4.5pc, and the commodity giants made up much of the highest risers list for the day. On the FTSE 100 (down 0.92pc, or 63.79 points, to 6890.42) BHP gained 3.3pc, or 45.5p, to 1400.5p and Royal Dutch Shell surged 1.6pc, or 34.5p, to 2218.5p. BP advanced 1.5pc, or 7.2p, to 483.4p. Among the smaller players, Petro
fac climbed 5.2pc, or 45p, to 915p and Tullow Oil rose 4.4pc, or 13.7p, to 326p. Premier Oil rocketed 10.3pc, or 7p, to 75p and EnQuest soared 10pc, or 4p, to 44p. Capita was the greatest faller on the FTSE 100 for the day, continuing its downward trajectory after last week’s profit warning. Shares dropped 5.3pc, or 25.3p, to 454.7p.
A ‘ buy’ rating from Goldman Sachs wasn’t enough to lift Lad
brokes Coral shares. The bookies fell last week after the regulator announced a clampdown on bet- ting machines. The stock broker has a target price of 170p on the stock. Shares slumped 8.8pc, or 11.5p, to 119.1p. Purveyor of bargain booze Conviv
iality Retail announced it had purchased 15 convenience stores in the south east. The acquisition of KMD Enterprises, which owns the sites, brings Conviviality’s total store numbers to more than 700. Conviviality, which operates stores under the Bargain Booze and Wine Rack brands, has not revealed how much the acquisition was for. Shares edged up 0.6pc, or 1.25p, to 207.25p.
Evraz shined as the improving global economic outlook continues to push up demand for metals.
Analysts at Jefferies upped their target price for the steel, iron ore and coal miner which operates in Russia by 20p to 100p a share.
The stock broker said steel prices are likely to rise significantly in the first half of next year. Shares shot up 16.4pc, or 38.4p, to 273p.
Morgan Sindall announced contracts worth £750m. The construction company has won a five-year deal to provide infrastructure at a site in Cumbria. The deal has a potential total value of £1.1bn if the option to extend it for an extra ten years is used. Sindall has also seen its contract with Heathrow Airport extended until 2020. Shares slipped 2pc, or 15p, to 729p.
Molins blamed delivery delays as it downgraded its full year forecasts. The firm, which makes packaging machinery and machines used by cigarette makers, said trading in the final quarter of the year had been lower than expected. But Molins said its strategic review was progressing well and order intake was up on last year. Shares slumped 4.7pc, or 2.5p, to 51p.
Investment company Marlowe soared on strong half year results. The company owns security systems firm Swift and water treatment business WCS Environmental. It listed on AIM in April after raising £3m to make its first acquisition. It raised another £10m from investors in September which it used to buy more businesses. In the six months to September 30 it reported revenue of £17.7m and pre-tax profit of £500,000. Yesterday the company also revealed plans to raise another £10m to fund more acquisitions of UK support services firms. Shares were up 8.6pc, or 25p, to 315p.