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Oil surge powers FTSE higher amid investor relief

Oil majors power FTSE 100 rally as Brent crude surges through $30 mark, with Saudi Arabia branding low price 'irrational'.

 
Oil surge powers FTSE higher amid investor relief

Oil majors have driven the FTSE 100 higher after Brent crude surged through the $30 mark, as Saudi Arabia's oil minister branded the beaten-up price 'irrational'.

Oil rose 5% to $30.29 a barrel, taking weekly gains to 6%, helping inject some relief into beaten-up markets. The FTSE 100 rose 104 points, or 1.8%, to 5,878, with oil majors among the biggest gainers.

Shell (RDSb) rose 4.7% to £13.80, BG (BG) was up 4% at 970p and BP (BP) rose 3.1% to 352.9p.

'Oil prices made an impressive bounce to take both Brent and West Texas Intermediate back up above $30,' said Augustin Eden at Accendo Markets. 'However, note that oversupply still persists and a Saudi oil minister talking of irrational price levels does not a bull market make, especially when financial markets are not exactly known for their rationality.'

In a broad-based rally also supported by yesterday's hints of further quantitative easing from the European Central Bank, almost every stock on the FTSE 100 made gains.

Miners were also strong risers as the commodities rout abated, with Antofagasta (ANTO) up 5% at 383.8p and BHP Billiton (BLT) trading 3.1% higher at 662.4p.

Emerging markets-focused stocks performed well. Luxury goods maker Burberry (BRBY), which conducts a substantial amount of business in China, rose 3.9% to £11.98 while Aberdeen Asset Management (ADN) was up 3.8% at 234.2p.

Pearson (PSON) was among the few FTSE 100 stocks to make losses, down 2.5% at 753p after yesterday's strong surge on news it would be maintaining its dividend.

Oil stocks also rose to the top of the FTSE 250, which jumped 1.4%. Tullow Oil (TLW) rose 10.7% to 143p, while Petrofac (PFC) was up 6.4% at 743.5p and Ophir Energy (OPHR) added 5% to 83.1p.

Shares in Woodford Patient Capital (WPCT ) bounced after a sustained sell-off, up 3.5% at 90.7p.

Another investment trust in recovery mode was James Henderson's Lowland (LWI ), up 7.4% at £12.08 and towards the top of the FTSE Small Cap, after steep falls in the market turmoil. The shares are down 13% since the turn of the year.

A surge in Japanese stocks meanwhile help power small cap investment trust Baillie Gifford Shin Nippon (BGS ) 5.8% higher at 423.3p.

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