Opec news sends oil price tumbling and weighs on London’s top stocks

We’ve seen sharp declines in the price of crude oil and base metals

Reports that Saudi Arabia and its allies could up oil production helped push down the value of London’s top index after a lacklustre session of trading.

Shares in Shell, BP and Harbour Energy all closed down heavily after a report in the Wall Street Journal sent oil prices down.

Opec, the cartel of oilproducing countries, will discuss the potential of increasing production by up to half a million barrels per day at the organisation’s next meeting in early December, the report said.

Oil prices plummeted on the news and the international benchmark. Brent crude had lost nearly 6% of its value by the time markets closed in Europe. One barrel of Brent cost 82.47 dollars, the lowest price in nearly two months.

The oil companies weighed heavily on London’s FTSE 100, which ended up closing down 0.2%, or 8.67 points, ending the day at 7,376.85.

CMC Markets analyst Michael Hewson said that markets were also concerned over potential further lockdowns in China after the country recorded its first Covid deaths since April.

“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,” he said. “The declines in crude oil haven’t been helped by a report that Saudi Arabia might back an increase in supplies.

“This has seen the likes of BP, Shell and Harbour Energy slip to the bottom of the FTSE 100.”

In New York the S&P 500 had dropped 0.6% by the time markets closed in Europe while the Dow Jones was down 0.3%.

In Germany the Dax index dropped 0.4% and France’s Cac closed down 0.2%.

On currency markets a pound could buy just under 1.18 dollars or 1.15 euros, up slightly against both.

In company news, Pendragon said that the deadline for a potential £400 million takeover has been extended.

The company said that its Swedish suitor Hedin Group will now have until December 9 to table an offer.