Market Report: Oils climb on fears output may face new disruption

Talk about good timing. As analysts raised their oil forecasts for 2012 yesterday, citing concerns over the potential for unrest around the world to disrupt production, the black gold's price jumped amid rumours of escalating tension with Iran.

The price of a barrel of Brent crude for January delivery leapt as high as $111.10 in the wake of fears of a possible closure of the highly strategic Strait of Hormuz. The concerns were stoked by reports earlier in the week claiming Iran's military would practice a closure of the channel, through which it is estimated 40 per cent of the world's oil exports travel.

Although oil prices eased back following confirmation the strait remained open, the oil groups on the top-tier index managed to keep hold of their gains. BG Group moved 42.5p higher to 1,367p while BP and Tullow Oil were driven up 7.7p to 452.25p and 41p to 1,369p respectively, with vague bid speculation also being revived around the latter.

The sector was helped by Citigroup increasing its oil forecast for 2012 to an average for Brent of $110 a barrel. Analysts from the broker said that among the factors they expected to support the price of black gold included "geopolitical risks", while they also pointed out that at the moment "Iran ranks as the number one political risk in the oil market".

At the same time, they picked out a number of their favourite stocks in the sector, including Premier Oil (up 5.9p to 377.3p) and Soco International (up 4p to 292.95p). Meanwhile, they downgraded Royal Dutch Shell's rating to "neutral", although the shares still pushed up 63p to 2,388p.

City voices were also putting the spike in oil prices down to vague speculation during the session that the US Federal Reserve could be considering introducing a third round of quantitative easing at some point next year.

That talk helped the FTSE 100 recover most of Monday's losses by rising 62.29 points to 5,490.15, while dealers also pointed to chatter that China may cut its reserve ratio rate for banks again, having done so at the end of last month.

Most of the blue-chip diggers were also mounting some form of rally, including Eurasian Natural Resources and Rio Tinto. They climbed 13p to 647.5p and 66p to 3,185p, with the latter helped by Australia increasing its iron ore export expectations. However, Talvivaara was left 10.2p worse off at 219.7p as Goldman Sachs urged punters to desert the Finnish miner, in part due to fears over the outlook for the price of nickel next year.

Back on the benchmark index, Lloyds managed to shrug off a fall in early trading and close 0.29p stronger at 24.72p. The bank bounced following its recent losses despite coming under attack from Nomura, which cut its rating on the European sector to "neutral".

The broker's analysts predicted trouble ahead because of their belief the EU will go into recession next year, and advised that – among the UK-listed names – HSBC (up 3.75p to 492.5p) and Standard Chartered (down 13.5p to 1,406p) were the safest bets.

While Thomas Cook fell 0.45p to 14.91p ahead of today's preliminary results, its rival tour operator Tui Travel was lifted 0.3p to 152.55p after the group's parent company Tui AG announced it had resolved to sell the majority of its shares in Hapag-Lloyds to Albert Ballin.

Speculation has been persistent that if Tui AG can successfully exit the shipping business, it will use the cash to attempt to reintegrate Tui Travel. However, traders warned punters not to expect deals among the tour operators any time soon.

As a busy week for results continued, the top three spots on the FTSE 250 were all occupied by stocks benefiting from updates being taken well. Domino Printing was the highest, shifting 15.58 per cent to 504.5p, while Imagination and Carpetright climbed 61.5p to 498.5p and 31.6p to 427p. Travis Perkins was less lucky, dipping 14.5p to 800p despite the builders merchant saying it was on course to meet expectations.

However, its admission that like-for-like sales at its Wickes chain had fallen 1.6 per cent since the start of year knocked fellow DIY retailer and B&Q-owner Kingfisher back 2.3p to 245.8p.

Elsewhere on the high street, SuperGroup ticked up 7.1p to 502.5p on hopes the fashion chain – which has not always been the most popular stock in the Square Mile – will impress with its interim figures today.

It proved to be a good session for the smaller oil companies as Rockhopper and Desire Petroleum jumped up 27.75p to 268.5p and 0.5p to 25p on AIM after successful drilling results from their joint Falkland Islands well.

Meanwhile, East Africa-focused Cove Energy revealed it had spudded an appraisal well off the coast of Mozambique and spurted up 8.75p, or 9.31 per cent, to 102.75p in response.

Suggested Topics
News
people'It can last and it's terrifying'
News
people Emma Watson addresses celebrity nude photo leak
Arts and Entertainment
tv
News
Katie Hopkins appearing on 'This Morning' after she purposefully put on 4 stone.
peopleKatie Hopkins breaks down in tears over weight gain challenge
PROMOTED VIDEO
Life and Style
fashionModel of the moment shoots for first time with catwalk veteran
Life and Style
fashionAngelina Jolie's wedding dressed revealed
Sport
Alexis Sanchez, Radamel Falcao, Diego Costa and Mario Balotelli
footballRadamel Falcao and Diego Costa head record £835m influx
News
i100
Arts and Entertainment
Madame Vastra and Jenny Flint kiss in Doctor Who episode 'Deep Breath'
tv
Arts and Entertainment
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Arts and Entertainment
Danish director Lars von Trier
tvEnglish-language series with 'huge' international cast set for 2016
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

HR Generalist (standalone) - Tunbridge Wells - £32,000

£30000 - £32000 per annum: Ashdown Group: HR Generalist (standalone) - Tunbrid...

Derivatives Risk Commodities Business Analyst /Market Risk

£600 - £800 per day: Harrington Starr: Derivatives Risk Commodities Business A...

Power & Gas Business Analyst / Subject Matter Expert - Contract

£600 - £800 per day: Harrington Starr: Power & Gas Business Analyst/Subject Ma...

Infrastructure Lead, (Trading, VCE, Converged, Hyper V)

£600 - £900 per day: Harrington Starr: Infrastructure Lead, (Trading infrastru...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering