Market Report: Goldman Sachs fuels hopes the oil price will riseComments Off on Market Report: Goldman Sachs fuels hopes the oil price will rise
Goldman Sachs threw the beleaguered oil industry a much-needed lifeline by suggesting the price of crude might be close to rock bottom.
Light at the end of the tunnel then? Perhaps a flicker.
Analyst Henry Tarr reckons battered prices could level off over the next six to nine months as US production drops, but warned the Opec nations might keep pumping out the black stuff like there’s no tomorrow.
Hardly a ringing endorsement to dig in, but a less gloomy outlook than before. It tallies with the predictions of the International Energy Agency that non-Opec production will chalk up its biggest decline in more than two decades, led by shrinking production at US shale fields.
Tarr upgraded BP to neutral, helping the stock up 3.2p to 338.5p.
He said the company’s rough ride will continue if oil prices remain depressed, adding: “A lower-for-longer environment should be fortuitous in allowing it to extract more value from the service chain and thereby drive costs lower in its upstream businesses.”
Petrofac also soaked up the Goldman effect, gushing 7.5p higher to 821p after the broker topped up its price target on the oil services firm to 1120p.
The oil price fell 94 cents to $42.95 (£27.83) today.
On the wider market, investor focus shifted to the US and the decision on an interest rate hike next week, with plenty of fence-sitting causing the FTSE 100 to drift 6.36 points off to 6149.45.
Investors hung up on Vodafone, 3.05p cheaper at 224.05p, and BT, down 5.95p at 426.15p, as the European Commission blocked the merger of Danish rivals TeliaSonera and Telenor, with traders fretting the competition watchdog could deter more deal making.
Recruiter SThree rose 21.75p to 371.75p as it revealed full-year pre-tax profits are expected to beat analyst expectations of £35.1 million to £38.5 million.
On AIM, Oakley Capital, fell 2p to 143p as its net asset value shrunk after a £130 million fundraise through a chunky share issue.
Alarm bells were ringing at e-procurement minnow CloudBuy, whose shares were suspended as its nominated adviser quit, giving it a month to find a replacement before its shares are cancelled from AIM.
It’s some way off becoming the world’s biggest tech business, which only last year founder and chairman Ronald Duncan, a former GB downhill skier, claimed it could become.
Revenues slumped 40% in the first half to just £887,000.
Apple’s revenues in the last quarter alone were $50 billion and that was a quiet period.