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FTSE rallies as US cold snap buoys oil price
FTSE 100 reverses losses as oil price rallies on spike in US demand prompted by cold snap.
Update: The FTSE 100 has reversed losses and closed in on the 6,000 mark as a rally in oil prices sparked by the US cold snap buoyed investors.
The UK blue-chip index rose 50 points, or 0.8%, to 5,961, reversing losses made in the morning's trading that saw the FTSE fall to a day low of 5,873.
The jump came as the oil price rallied above the $32 mark, up 0.8% on the day, on US data showing a jump in demand for products such as heating oil following the cold snap in the country. That served to quell fears sparked by earlier data showing a rise in US crude inventories.
'The price of oil whipped around from gains to losses and then back to gains which were sustained despite the release of a much bigger than expected inventories build,' said Jasper Lawler, market analyst at CMC Markets.
'It's another piece of evidence that short-sellers are abandoning ship, especially while the dollar slides before the Fed meeting.'
Shares in BG were also given a fillip by Shell shareholders voting to approve its takeover, as had been expected.
FTSE dips as oil suffers fresh falls
(11:07) The FTSE 100 has fallen after the oil price suffered another drop following a larger-than-expected build-up in US supplies.
The UK blue-chip index fell 31 points, or 0.5%, to 5,880, as the price of Brent crude fell from a high of $32.68 overnight to $31.11, down 2.2% on the day. The falls came as US crude stocks rose by 11.4 million barrels last week, well ahead of analyst expectations of a 3.3 million rise.
Miners also fell, as copper prices dropped on persistent fears over economic growth in China. Anglo American (AAL) was down 4.7% at 241.5p, Antofagasta (ANTO) fell 3.5% to 364.9p and BHP Billiton (BLT) was down 3.1% at 645.2p.
Royal Bank of Scotland (RBS) was also among the fallers, down 2.6% at 254.1p after the bank was forced to write off £2.5 billion from its fourth quarter profits to cover the cost of mis-selling allegations.
Sage (SGE) bucked the losses to post a 5.3% rise to 597.5p after the software business posted a 6.6% rise in revenue for the first three months of its financial year.
Shares in Aberdeen Asset Management (ADN) also edged higher, up 1% at 235p, after the investment group reported a 2.4% rise in assets under management.
On the FTSE 250, which dropped 0.3%, Just Eat (JE) was a heavy faller, down 7.9% to 387.2p after analysts at Morgan Stanley cut their rating on the takeaway website to 'underweight' from 'equal weight'.
RPS Group (RPS) was meanwhile the biggest 'small cap' faller, down 11.9% at 183.5p after the consultancy group announced it could be forced to sell some of its energy business due to the tumbling oil price.
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- Royal Dutch Shell PLC (RDSb.L)
- BP PLC (BP.L)
- BG Group PLC (BG.L)
- Anglo American PLC (AAL.L)
- Antofagasta PLC (ANTO.L)
- BHP Billiton PLC (BLT.L)
- Royal Bank of Scotland Group PLC (RBS.L)
- Sage Group PLC (SGE.L)
- Aberdeen Asset Management PLC (ADN.L)
- Just Eat PLC (JE.L)
- RPS Group PLC (RPS.L)
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by Gavin Lumsden on Jul 22, 2016 at 16:24