Market Report: Shell and BP miss out on oil price rebound

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A rebound in the price of the black stuff was not enough to lift London’s oil stocks from the bottom of the barrel today, with traders more concerned about future price swings.

Shell, also dealing with the aftermath of a fire at a South Korean liquefied natural gas project, was the biggest faller on the Footsie, dropping 48p, or just more than 2%, to 2078.6p.

BP was close behind, off 5.7p to 447.4p. Mid-cap peers Tullow Oil and Cairn Energy, slid 1.4p to 213.8p and 2.2p to 206.1p, respectively. Oil services firm Wood Group didn’t escape the gloom, down 10.5p to 665p.

Oil prices bounced back today after sliding 5% and hitting a two-month low, with Brent crude up 0.35 cents to $46.75 (£36.13) a barrel. But traders said a product glut, weakening economic growth and potential disruptions hitting supplies, such as attacks on pipelines, meant oil prices could be volatile.

There was little to cheer about for Diageo, maker of Guinness and David Beckham-fronted whisky Haig Club, which was also in the red. It slipped 36.5p to 2124.5p after Barclays downgraded it to “equal weight” from “overweight”.


Star appeal: David Beckham collaborated with Diageo on Haig Club (Diageo)

Anticipation for the arrival of closely watched US jobs data meant the FTSE 100 was little changed, down just 4.23 points at 6529.56. 

The more domestically focused FTSE 250 continued its post-Brexit revival, rising 89.51 points to 15,988.32. Its leaderboard was filled with housebuilders, including Bovis Homes, up 53p at 712.97p, and Crest Nicholson, 17.4p higher at 369.9p, which were recovering after a hammering in the wake of the Leave vote.

Banks, another referendum casualty, also found themselves on more solid territory: Virgin Money climbed 11.5p to reach 216.5p, Barclays was up 3.45p at 138.2p and RBS moved up 4.5p to 163.1p.

On AIM, Churchill China was also feeling chipper, contradicting yesterday’s glum outlook from rival Portmeirion, saying that it remained confident despite the Brexit uncertainty. Shares climbed 12.5p to 730p.

Brexit turned out to be a boost for publisher Johnston Press, which bought the i newspaper in April. It rose 1.75p at 14.9p, after revealing that the newspaper’s circulation hit 319,000 in the week after the referendum.

In contrast, Mike Ashley’s Sports Direct continued its post-Brexit slide, falling 13.2p to 265.9p, after a Morgan Stanley downgrade to “equal weight” from “overweight”. Shares in the company have now lost 32% since the June 23 poll.

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July 8, 2016 |
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