Market Report: Slump in the price of crude sends oil shares sliding

Oil shares ran dry as the crude price slumped and investment houses pulled back their forecasts.

British Petroleum fell 41p to 765p and Shell 22p to 426p, helping to push the oil sector down by approaching 5 per cent. In the autumn BP was riding at 956.5p and Shell at 484.5p.

With Iraq at last resuming exporting, mild weather in the US and the Asian turmoil the crude price is under intense pressure and has fallen sharply.

Goldman Sachs and Societe Generale Strauss Turnbull piled on the agony. The American securities house cut its crude estimate for this year by $1 to $17 a barrel. Only a few months ago the analyst Peter Nicol lowered his forecast by $3 to $18.

John Toalster at SocGen reduced his crude estimates for this year and next from $17 to $17.80 and $18.70 respectively. He moved his stance on the sector from buy to neutral.

Lasmo was lowered 9p to 265p and Enterprise Oil 12p to 574p.

The oil retreat undermined the rest of the stock market although Footsie, encouraged by futures influences, managed to end 1.9 points higher at 5,264.4. At one time it was off 41.7.

The supporting shares outperformed their peers with the FTSE 250 index up 30.2 to 4,858.9; even the FTSE SmallCap managed a 6.8 gain to 2,335.3p.

Insurers were again the main Footsie spur. Hopes of more buy backs as well as improved margins lifted Royal & Sun Alliance 40p to 658p and Sun Life & Provincial 22p to 495p. Other financials made headway. Woolwich starred with a 13p gain to 338p, a peak, and Bank of Scotland rose 18p to 592.5p.

Norwich Union, the insurer, was another recent recruit to reach a high. Its bonus statement was well received but the conviction is growing that the former mutual will not see out the year as an independent group. The shares rose 8.25p at 406p, capitalising the group at around pounds 8bn.

Cadbury Schweppes enjoyed support from Dresdner Kleinwort Benson and SBC Warburg, gaining 15p to 630p. Warburg produced a 780p target. The investment house also gave Booker, the food group, a friendly nudge, pushing the shares 13p higher to 333.5p.

Engineer GKN moved ahead 58p to 1,335p following its Canadian helicopter deal and bullish comments from Lehman Brothers and Warburg which is looking for the price to reach 1,500p.

Granada put on 35p to 990p, seemingly drawing belated benefit from a number of analysts' comments. Ladbroke, up 14p to 288p, was another in catch-up mode - in this case the Coral takeover.

Burton's trading statement left the shares 3p higher at 143p but failed to allay fears of poor festive trading by some retailers.

Clinton Cards, the greeting cards chain, produced an upbeat statement; the shares rose 6.5p to 105p. Its performance encouraged WH Smith, up 8p to 400p. Henderson Crosthwaite caution lowered Dixons, reporting next week, 6.5p to 596p. The house was, however, positive on Kingfisher, 13.5p firmer at 876.5p. Analyst briefings helped Hillsdown Holdings 6.5p harder at 155.5p.

Olives Property added 6.25p to 38p following a bid approach and a 65p offer for the JLI food group prompted a 7.5p gain to 63.5p. Activity at the printing group Fairway indicated the signalled bid action could be near. The shares rose 3p to 65.5p.

Cambridge Mineral Resources ended 1.75p lower at 17.25p after confirming the takeover of South Atlantic Resources, exploring for minerals in the Falkland Islands.

Emerald Energy held at 6p. Monument Oil & Gas is splashing out $7.3m for a 14 per cent stake in one of its Colombian wells. The long drilling programme continues at its Chawina 2 well; the results should be known within two weeks.

Albion, the menswear manufacturer, cut a 20p dash to 70p after a sharp profits advance and dividend increase.

Blick, the electronics group, hardened 17.5p to 297.5p ahead. There is vague talk of corporate action.

The yearly shareholders' meeting is due next month. Last year profits fell from pounds 15.3m to pounds 12.9m.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

SThree: Experienced Recruitment Consultant

£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent