Nevertheless, London investors were willing to put their faith in Opec yesterday as they cheered the agreement, negotiated in secret and agreed over the weekend, which added 15 per cent to the price of a barrel of oil yesterday.
Despite warnings from analysts that the euphoria could be short-lived, oil stocks jumped. British Petroleum, which is the most sensitive to oil- price movements, was the best-performing share in the FTSE 100, rising 66.5p to 933.5p. It was closely followed by Lasmo, 19.5p better at 291.5p, Enterprise, which gained 30p to 573p, and Shell, up 18.75p to 453p. Even BG joined in with a 14p spurt to 313.5p.
The news came on a good day for Monument Oil & Gas, which revealed new deals for its Caspian Sea oil. The shares rose 5p to 67.5p.
Meanwhile, speculation that the Bangladeshi government was about to award new exploration contracts lifted shares in Cairn Energy 13p to 429.5p. Key discoveries in Bangladesh boosted the shares to a peak of 634.5p a year ago, but since then the stock has drifted as investors await the next bit of news.
Tullow Oil, down 0.5p to 151p, is also tipped to win a key block in Bangladesh. Brokers expect an announcement before the end of the month.
The oil price activity livened up what was otherwise a dull day on the London market. Despite a bright start, which briefly took it through the 6,000 barrier, the Footsie soon slipped back and eventually settled at 5947.0, down 9.3 points.
Caution about expansion prospects for food retailers hit Tesco, off 20p at 550p. The effect was exasperated for Asda by the shares going ex-dividend. They retreated 8.75p from Friday's all-time high to close at 200p.
Rumours of poor trading in its sports shops hit JJB Sports, down 25.5p to 675p. The shares have fallen 18 per cent since hitting an all-time high of 822.5p a few weeks ago. Rival JD Sports gave up 5p to 123.5p.
The bid battle enveloping luxury hotel group Savoy helped its non-voting A shares up 137.5p to another all-time high of 1887.5p. Shares in major shareholder Granada, which is bickering with the Wontner family about who gets the majority of the spoils, put on 3p to 1038p.
Computer services group MDIS continued its recent rerating. Investors are beginning to warm to the stock, which was one of the most disastrous new issues of recent years. Analysts argue that the shares, which added 2p to 68.5p, are worth more than 100p if conventional information technology sector multiples are applied. They were 18.5p less than a year ago.
Telecoms companies gave up some of their recent gains as the speculative money rushed elsewhere. Mobile operators Vodafone, down 18p at 596 and Orange, down 11p at 412p, were out of favour as was local operator Colt Telecom, which slipped 65p to 1505p.
A Henderson Crosthwaite recommendation continued to lift electronics group Bowthorpe, which hit a new high of 478.5p, up 5p.
The broker reckons the company is enjoying strong growth in its markets and that recent difficulties in the semi-conductor industry are now in the past.
Tomkins was one of the few Footsie stocks to make any headway. It gained 3.5p to 360p after buying privately owned fluid control group Schrader- Bridgeport for pounds 112m. The move will ease pressure from institutional investors who are keen for Greg Hutchings' conglomerate to return spare cash to shareholders. The shares are up by a fifth since the beginning of the year.
Meanwhile, electronics tiddler Silvermines added 3p to 46.5p after announcing a deal to supply transmitters for digital terrestial television to Castle Transmission International, the former BBC transmission arm. The deal is thought to be worth about pounds 20m.
Several shares moved ahead of results announcements today. Computer components distributor Datrontech, which is expected to unveil pre-tax profits of about pounds 6m this morning, gained 16p to 134p. Food group S Daniels, which recently bought the New Covent Garden Soup Company, also put on 14.5p to 65p ahead of today's figures.Reuse content