Oil tumbles below $82 as Chinese economy slows
OIL prices fell to their lowest level in nearly four months yesterday as fears over a slowdown in the Chinese economy outweighed cuts in output by some of the world’s top exporters.
In a boost to motorists hoping for cheaper prices at the fuel pumps, a barrel of Brent crude dropped more than 4pc to below $82 a barrel.
That was a far cry from when oil was trading at $97 at the end of September.
The latest slump came after figures showed China’s exports fell faster than expected in October – overshadowing supply cuts by Saudi Arabia and Russia.
Zhou Hao, an economist at asset management group Guotai Junan International, said: ‘The bad exports data may hit market confidence as we had expected the supply chain of exports to recover.’
The slide in oil prices came as Saudi Aramco – the world’s biggest oil exporter – said profits fell 23pc over the summer as lower oil prices hit business.
Only last week the World Bank warned that Brent crude could top $150 a barrel if the IsraelHamas war spills out across the Middle East.
But while lower oil prices are likely to be welcomed by motorists, it did little for investors with shares in BP and Shell.
BP dropped 2.1pc, or 10.45p, to 481.05p and Shell lost 1.8pc, or 47.5p, to 2626p.
China’s disappointing export data also weighed on miners, with Anglo American down 3.5pc, or 78.5p, to 2139.5p, Antofagasta sliding 3.4pc, or 46p, to 1303.5p, Glencore losing 2.4pc, or 10.4p, to 431.6p and Rio Tinto retreating 2pc, or 104p, to 5231p.
The FTSE 100 slipped 0.1pc, or 7.72 points, to 7410.04 and the FTSE 250 inched up 0.1pc, or 14.24 points, to 17761.71.
There was better news for insurers, however.
Shares in Direct Line rose 8pc, or 12.65p, to 170.2p after it pointed towards signs of recovery in its motor business. The FTSE 250 car insurer has been hammered by the soaring cost of repairing and replacing second-hand cars over the past year.
But it has since raised prices, with the average cost of its motor insurance cover up 37pc in the third quarter while motor insurance premiums more than doubled to £826.8m.
Fellow insurer Beazley gained 7.1pc, or 37.5p, to 567.5p after it said it expected a strong end of the year following an uptick in business.
Its insurance written premiums rose 9pc to £3.5bn in the nine months to the end of September.
Beazley also cashed in on a boom in property insurance while claims for natural disasters and cyberattacks were in line with expectations. Mike Ashley’s Frasers Group, which owns brands such as Sports Direct, Jack Wills and Flannels, will return cash to investors through an £80m share buyback. Shares in the business rose 3pc, or 24.5p, to 833.5p.
Hilton Food Group, which supplies meat and ready meals to supermarkets, posted higher third- quarter revenues amid a further recovery in its UK seafood business. Shares rose 4.3pc, or 28p, to 674p.
Embattled Hipgnosis Songs Fund appointed a chairman a day after it said it will not pay any dividends for at least another six months as it fights for its survival.
Robert Naylor, who held the same role at the rival investment firm Round Hill Music, replaced Andrew Sutch whose departure was announced towards the end of September.
Shares in Hipgnosis, which allows investors to make money from the royalties of tracks by famous artists such as Justin Bieber and Shakira, fell 0.8pc, or 0.6p, to 70.5p.