Shares in BP (BP) have risen towards the top of the FTSE 100 as the oil major announced a surprise resumption of share buybacks and a doubling of third quarter profits.
The shares jumped 2.9% to a three-year high of 516p, boosted by news the company would become the first oil major to resume share buybacks since the 2014 oil price crash.
Underlying profits for the third quarter hit £1.9 billion, up from £933 million over the same period last year.
Mike van Dulken, head of research at Accendo Markets, said the resumption of share buybacks was helping to drive the shares higher.
'Whilst income seekers may be miffed at no increase to the 10 cents per quarter dividend, resumption of a supportive share buyback to offset scrip dividends (shares instead of cash) has been well received,' he said.
'It suggests management even more comfortable with current oil prices, considering cash generation more than capable of covering commitments to both growth and capital returns.'
But Michael Hewson, chief market analyst at CMC Markets UK, suggested the cash could be better used to pay down debt and provide better cover for the dividend.
'Given the long road to recovery it does seem rather short sighted of management to not try and look at making a more sizeable reduction in net debt, particularly since the company is doing so well in improving revenues, cost cutting, and divestments helped by a break-even oil price that is set to come down further,' he said.
'It's been a while since the company has been able to start getting close to covering the dividend, and while interest rates remain low this may be sustainable in the short term, however management need to understand that fixing the roof while the sun is shining might also be a good idea, particularly if oil prices start to slide back.'
On the FTSE 250, shares in Just Eat (JE) jumped 4.9% to 776p as the takeaway ordering website raised full-year revenue guidance for the second time in four months.
Shares in Weir (WEIR) were meanwhile down 6.4% at £19.62 after the pump and valve manufacturer said full-year profits were likely to be slightly lower than forecasts.
Royal Mail (RMG) was meanwhile hit by a downgrade from analysts at Credit Suisse, who cut their rating to 'underperform' from 'neutral', warning of a weakening mail market and labour costs.