Following the lead of their OPEC peers, a cabal of 11 countries – which includes the likes of Mexico, Malaysia and, crucially, Russia – has agreed to slash their oil output by just over half a million barrels a day. Understandably Brent Crude was overjoyed at the news, the black stuff surging by 5.5% to cross the $57 per barrel mark; that’s the commodity’s best price in almost a year and a half, and an increase that has had quite the effect on the oil sector this morning.
BP and Shell have risen 2% and 3% respectively, while the likes of Tullow Oil and Premier Oil have rocketed 10% and 13% higher. The UK mining stocks have also had a boost, with BHP Billiton, Anglo American Antofagasta all up between 1.5% and 3%. Interestingly, however, this has only had a minor effect on the FTSE, which barely rose 0.1% after the bell. That muted start might be because if the UK index pushes any higher it will once again reach 7000, a level it flirted with last Friday and one that investors might not feel too comfortable with it crossing.
Like the FTSE the Eurozone indices were fairly quiet this morning; the DAX fell 25 points, while the CAC only managed a 6 point increase. This might be because of Monte dei Paschi-related jitters, with Italy’s oldest bank now on borrowed time as it tries to raise €5 billion in capital.