Crude oil rockets as BP and Shell help push FTSE higher

London’s markets inched to gains on Tuesday as the oil majors benefited from US and UK plans to ban Russian oil over the conflict in Ukraine.

The price of crude oil rocketed to more than double its price from a year ago as speculation increased over the potential import ban.

Brent crude jumped by 7.87% to 132.91 US dollars per barrel when the London markets closed.

BP climbed by 18.5p to 380p as a result, while Shell, which had apologised earlier on Tuesday for purchasing Russian oil last week, gained by 58.5p to 2,039.5p.

The FTSE 100 ended the day up 4.63 points, or 0.07%, at 6,964.11 points.

Chris Beauchamp, chief market analyst at IG, said: “The day has seen markets repeatedly attempt to stabilise, with some buying developing despite the news of UK and US sanctions on Russian oil exports.

“While there seems little prospect that the rest of Europe will follow suit, the move has brought inflation and supply concerns back to the forefront.

“Markets look to be in more of a consolidation mode than was the case yesterday, but no one as yet seems to be in any hurry to buy the dip.”

European stocks improved throughout the session to claw back some losses on the back of reports that the EU is mulling issuing joint bonds in respect of energy and defence spending as it seeks to reduce its reliance on Russian energy.

The French Cac was down 0.34% and the German Dax was 0.02% lower at the end of the session.

In the US, sentiment was more shaky as the main markets dipped sharply ahead of President Biden’s oil ban announcement.

Meanwhile, sterling had another day of falls, as the pound decreased by 0.09% against the dollar to 1.310, and dropped 0.14% against the euro to 1.203.

In company news, high street bakery chain Greggs closed lower after it warned that the price of its products is likely to go up for the second time this year due to runaway cost increases.

The company finished 77p lower at 2,206p after it told shareholders the cost of doing business is expected to rise between 6% and 7% for the company this year due to higher staffing and ingredient costs.

Office firm IWG jumped in value after it agreed to merge its digital assets with flexible workspace platform The Instant Group in a £270 million deal.

It added that it then plans to spin off the combined entity through a stock market listing by the end of the year.

Shares in the firm increased by 22.6p to 255p at the close of play.

Elsewhere, asset manager and insurer M&G was firmly among the day’s top performers after it said it would offer investors a £500 million share buyback programme as capital generation surpassed its targets.

Shares in the company climbed by 26.8p to 205.1p as operating profits were also above expectations.

The biggest risers on the FTSE 100 were M&G, up 26.8p at 205.1p, Fresnillo, up 69p at 808.4p, ITV, up 5.72p at 79.16p, and BP, up 18.5p at 380p.

The biggest fallers were Polymetal, down 80.53p at 92.02p, Relx, down 142p at 2,071p, Ocado, down 75.5p at 1,105p, and Rightmove, down 39.2p a 612.8p.