Market Report: Opec’s oil puming triggers a flood of selling
The FTSE 100 ended the week down 36.71 points at 6,238.29
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Your support makes all the difference.Opec’s decision to keep pumping oil like there’s no tomorrow triggered a flood of selling in the sector.
It is set to continue producing around 31.5 million barrels a day, adding to one of the worst gluts in history and causing the price of Brent crude to fall 58 cents, or 1.3 per cent, to $43.26 a barrel.
The decline hurt BP, down 8.85p, or 2.1 per cent, to 359.7p. Shell was 29.5p cheaper at 1,599.5p, BG Group 9p worse off at 1,025p, and the mid-cap producer Tullow was down 10.8p at 188.3p.
The oil services companies Petrofac, 20.5p lower at 811p, and Lamprell, down 3.75p at 104.5p, also felt the pain even after upgrades to “buy” from Liberum, which tipped both to rise more than 50 per cent over the next 12 months.
The FTSE 100 ended the week down 36.71 points at 6,238.29 as strong US jobs figures convinced investors that the Federal Reserve would hike interest rates this month for the first time since 2006.
Simon Smith, chief economist at the foreign exchange broker FxPro, said: “This makes a rate hike from the Fed on 16 December a near certainty.”
Gold producers including Randgold Resources, up 110p at 4,289p, improved as spot gold surged 2.3 per cent to $1,086 an ounce – moving in the opposite direction to the US dollar, which gold is priced in.
A new 10-year low for the price of iron ore dragged Glencore down 2.93p to 87.29p and Anglo American 10.8p to 376.05p.
Shire, 47p off at 4,504p, is yet to make another bid for pharmaceutical rival Baxalta and is “unlikely” to strike a deal with the US rare diseases company, according to JP Morgan, given Shire’s lowly share price.
Shares in TyraTech, behind treatments for head lice, jumped 0.5p, or 21 per cent, to 2.88p after a glowing report from broker Allenby, which said the AIM-listed company’s £3.2m fundraising will accelerate its expansion. That came as private equity firm Oryx International, run by Christopher Mills, bought a 3.9 per cent stake in the business. Its other investments include a 17.6 per cent share of five-a-side football operator Goals Soccer Centres.
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