Oil jumps 5pc on Suez canal congestion
Oil prices bounced back on Tuesday, partly due to the blockage of the Suez Canal, a key transit route for the commodity. Brent crude shot up more than 5pc to $ 64.3 a barrel over fears disrupted shipments could put oil supply under pressure, and as “bargain hunters swooped in to snap up the relatively cheap contracts”, said David Madden, analyst at CMC Markets. It came after oil fell to its lowest mark in over a month on Monday on concern tighter coronavirus restrictions in Europe would dampen demand from key industries like aviation. Also helping to boost sentiment was new data from the Energy Information Administration that showed US oil inventories rose by 1.9m barrels in the week ended March 19, to 502.7m barrels, compared to expectations for a 272,000-barrel drop according to analysts polled by Reuters. Figures last week reported stockpiles of 2.4m barrels, suggesting that “refineries are working their way through the backlog caused by the big freeze”, said Madden. Some analysts suggest a slowing increase in stockpiles, which comes as travel starts to rebound in the US, could help crude oil rally to fresh highs. Heavyweights BP and Royal Dutch Shell gained on the expectation, adding 5.8p to 301.55p and 27p to £14.63 respectively. BP’s gains come despite Moody’s downgrading the oil giant from its highest rating. The gains helped to lift London’s markets higher after a shaky start to the week, with the benchmark FTSE 100 adding 13.7 points to 6,712.89 and the FTSE 250 closing up 70.78 points to 21,402.54. Energy and mining stocks helped lead the benchmark after data showed a better-than-expected rebound in British business activity in March with services increasing at the fastest rate since August. Anglo American added 62p to £27.83, Glencore rose 6.15p to 278.15p and Rio Tinto gained 77p to £54.22. In company news, Halma was among the top risers on the benchmark after the medical equipment provider upped its profit guidance having made “good progress” in the second half of the financial year. It now expects adjusted pre-tax profit to be in line with last year’s £267m, better than previous predictions of a 5pc fall. Halma said revenue has grown in its four regions, with the strongest performance seen in Asia Pacific. Shares gained 54p to £23.59. On the FTSE 250, Softcat shot up 226p to £17.85, making it the second biggest gainer on the mid-cap index following Gamesys. The IT firm said gross profits increased by a fifth to £134.5m, as revenues boosted 10pc to £577m for the six months to January. Meanwhile, house-builder Bellway lost 79p to £34.13 as it revealed another £20m charge to deal with cladding issues, while also posting a 4pc decline in half-year profits to £280.2m.