Oil majors Shell and BP hit fresh post-pandemic records as crude prices reached their highest levels in just over seven years.
Shell was up 1.5 per cent, or 28.4p, at 1873.8p while BP rose 0.5 per cent, or 2p, to 395.75p – their highest levels since February 2020.
The gains came as prices of Brent Crude passed $88 a barrel, for the first time since October 2014.
Price boost: Shell was up 1.5 per cent, or 28.4p, at 1873.8p while BP rose 0.5 per cent, or 2p, to 395.75p – their highest levels since February 2020.
Another oil benchmark, West Texas Intermediate, was also trading at around a seven-year high close to $86 a barrel.
The latest surge followed an attack by rebels in Yemen against the United Arab Emirates, which raised fears of supply disruption.
Tensions were increased further when neighbouring Saudi Arabia launched air raids in Yemen in retaliation.
Stock Watch – Sanderson Design
Interior design group Sanderson surged to a three-month high as demand for its UK-made fabrics and wallpaper rose following Brexit and disruption to supply chains.
It expects profits for the year to the end of January to be at least £12m, ‘significantly ahead’ of expectations and up from £7.1m last year.
The group also highlighted foreign success, with sales in North America up 40pc year-on-year, where it is enjoying ‘very strong’ orders. Shares rose 21.9pc, or 33.5p, to 187p.
Brent’s rally means it has risen around 60 per cent in the last 12 months and over 350 per cent since April 2020, when its value plunged to just under $20 a barrel.
Some analysts, including Goldman Sachs, have predicted that the prices of oil could climb back to $100 a barrel this year as the perceived threat of Omicron diminishes, allowing the global economy to reopen and kick-start demand for fuel.
The world’s oil market is also facing a supply squeeze unless the OPEC+ group of oil-producing countries, such as Russia and Saudi Arabia, decide to open the taps to meet demand at the risk of prices falling back again.
Political instability is adding upward pressure to oil prices, with the Yemen conflict and rising tensions between Russia and Ukraine worrying energy markets.
The FTSE 100 dropped 0.6 per cent, or 47.68 points, to 7563.55 while the FTSE 250 fell 1 per cent, or 218.93 points, to 22,652.71.
Markets in London were under pressure after rising to a two-year high on Monday, with some traders looking to take profits following the rally.
Miners also weighed on the index amid weaker commodity prices, with Russian group Evraz, which is part-owned by Chelsea owner Roman Abramovich, dropping 2.8 per cent, or 15.8p, to 557.2p while precious metals group Polymetal fell 1.9 per cent, or 21.5p, to 1132.5p.
GlaxoSmithKline shares fell 0.4 per cent, or 6.6p, to 1701.2p, as it emerged that it is in talks with the sovereign wealth funds of Qatar and Singapore to fend off Unilever’s takeover efforts.
Cybersecurity group Darktrace inked a multi-million dollar deal to provide its artificial intelligence technology to one of the world’s largest airlines.
The airline, which operates around a thousand flights each day to over 100 destinations, will use Darktrace tech to protect the business from ‘sophisticated’ threats. Darktrace rose 5 per cent, or 20.6p, to 433.8p.
Mid-cap oil and gas firm Energean jumped by 3.7 per cent, or 33.5p, to 949.5p after a record performance in 2021.
The firm noted that record gas prices in Italy, one of its key markets, and better than expected production helped lift its revenues to £364million, up from £247million in 2020.
Telecoms giant BT was up 3.1 per cent, or 5.55p, to 186.6p after analysts at Goldman Sachs added it to their ‘conviction buy’ list and raised their target price on the stock to 270p from 180p.
Stock trading platform Plus 500 bounced up 2.3 per cent, or 32.5p, to 1470p after it was granted a tax cut by the Israeli government.
Its status as a ‘preferred technological enterprise’ has been extended and as a result, its annual corporation tax rate will be lowered to 12 per cent from 23 per cent.
Retirement income and pension specialist Just Group surged 8.2 per cent, or 7.1p, to 93.3p after its sales jumped 25 per cent to £2.7billion during 2021.