Oil stocks on the march as Brent crude rebounds
Oil stocks were again on the rise as investors focused on tight energy supplies amid the volatility gripping markets.
Brent crude traded at around $107 a barrel as it rebounded from a recent slump that saw its price drop below $100.
North Sea-focused Harbour Energy was one of the strongest risers, up 2.1pc, or 6.7p, to 325.7p.
BP gained 0.3pc, or 1.3p, to 386.55p and rival Shell climbed 0.5pc, or 10p to 2043.5p.
Mid-cap energy stocks benefited from the rebound in crude, with Tullow Oil rising 4.5pc, or 1.9p, to 43.9p and Energean adding 2.8pc, or 27.5p, to 998p.
Firms with ties to the sector also performed well, with oil rig builder Petrofac up 2.7pc, or 2.9p, to 112.4p and engineer Wood Group gaining 2.1pc, or 3.15p, to 156p.
Oil and gas prices have surged in the wake of the war in Ukraine as sanctions severely restricted supplies from Russia, one of the world’s largest producers.
That has been exacerbated by a recovery in demand following the pandemic. The surge has resulted in handsome profits for oil and gas firms. But this has drawn criticism as price rises have left households with crippling energy bills.
Higher energy prices also show little sign of abating, with broker Jefferies hiking its forecasts.
Analysts predicted crude would remain at just over $105 a barrel at the end of 2022, up from their previous estimate of around $91.
The FTSE 100 rose 0.1pc, or 7.16 points, to 7196.24 while the FTSE 250 was up 0.2pc, or 37.42 points, at 18,912.95.
Markets continued to swing wildly amid jitters about a global recession despite hopes that aggressive action by central banks could bring inflation under control. Traders were also keeping one eye on machinations at Westminster as the campaign to succeed Boris Johnson began to pick up steam, although Hargreaves lansdown analyst Sophie lundYates said the Prime Minister’s resignation ‘hasn’t been viewed as a catastrophe’ by the City.
Asian markets initially posted strong gains but closed mostly flat after former Japanese Prime Minister Shinzo Abe was assassinated in the city of Nara.
However, there was some good news from the US jobs data, which saw 372,000 posts added to the economy in June – better than expected despite interest rate hikes from the Fed and some companies warning of redundancies.
Aircraft engine maker RollsRoyce rose 2.2pc, or 1.87p, to 87.13p after a faster-thanexpected rebound in demand for passenger aircraft engines.
Recession worries weighed on some banking stocks, with Standard Chartered down 3pc, or 17.6p, at 579.4p, HSBC losing 1.8pc, or 9.8p, to 525.8p and Lloyds sliding 0.2pc, or 0.01p, to 42.2p.
But NatWest rose 0.2pc, or 0.5p, to 218.8p while Barclays rose 0.6pc, or 0.94p, to 151.96p.
Mining firms had mixed fortunes amid fears a slowdown will dent demand for commodities such as iron ore and copper.
Anglo American rose 0.3pc, or 8.5p, to 2824.5p while Rio Tinto shed 0.5pc, or 25p, to 4835p, Glencore sank 0.4pc, or 1.9p, to 431.35p and Antofagasta eased 0.3pc, or 3.5p, to 1113p.
Fellow digger BHP slumped 1.9pc, or 43p, to 2205.5p after it lost an appeal to block a £5bn lawsuit connected to the collapse of a dam in Brazil in 2015. The incident killed 19 people and triggered the worse environmental disaster in the country’s history.
And troubled lender Amigo fell 8.6pc, or 0.42p, to 4.44p after boss Gary Jennison said it had ‘learnt the lessons of the past’ following a mis-selling scandal that left it close to collapse. it made £170m profit for the year to March 31.