Oil prices tumbled to a four-month low as investors fretted that a slowdown in the global economy was hitting demand.
On a turbulent day on commodity markets, Brent crude fell more than 5 per cent to below $77 a barrel, the lowest level since early July.
As recently as September, oil was close to $97 a barrel, and last month the World Bank warned it could top $150 if the conflict in Gaza triggered a full-scale war in the Middle East.
The slump in prices will be welcomed by businesses and motorists who could benefit from cheaper petrol and diesel.
But it did little for oil stocks in London, with BP falling 2.84 per cent or 13.7p to 468.4 and Shell down 3.04 per cent or 80p to 2,555.5p, while mid-cap rival Harbour Energy sank 7.37 per cent or 17.8p to 223.9p.
On a turbulent day on commodity markets, Brent crude fell more than 5 per cent to below $77 a barrel, the lowest level since early July
The slide in heavyweight oil stocks helped to drag the wider London market into the red after three days of gains.
Signs of optimism re-emerged this week after inflation eased by more than expected in the UK and US, sparking speculation about when interest rates may be cut.
But markets went back into reverse yesterday as the FTSE 100 fell 1.01 per cent or 75.94 points to 7,410.97 and the FTSE 250 was down 1.74 per cent or 325 points to 18,351.48.
Trading was also subdued in Europe, while on Wall Street the Dow Jones Industrial Average slipped 0.13 per cent.
Danni Hewson, AJ Bell’s head of financial analysis, said: ‘There was only ever going to be a finite amount of time that the inflation relief rally would run – and today time ran out.
‘Investors haven’t changed their minds about when they expect interest rates to start coming down, but they also can’t ignore the fact that there’s a long stretch of time between now and then, with the here and now still causing a bit of trouble.’
Stock Watch – Celadon Pharmaceuticals
Celadon Pharmaceuticals has signed its third contract in six months for its cannabis-based medicines.
The West Midlands group’s latest deal is with a European medicinal cannabis company and could be worth up to £26million over three years. They have the option of extending the contract by two years.
Celadon grows its cannabis indoors and believes this has attracted European firms. Shares, which peaked at 320p in January 2021, soared 29.52 per cent or 24.5p to 107.5p.
There was some optimism from Great Portland Estates, which owns offices and shops in the West End and City of London. It said it was now buying more properties in the capital than it was selling for the first time in a decade.
With workers returning to central London, it also upgraded its outlook for rental growth.
But with higher interest rates driving down the value of its property portfolio – which declined by 10.3 per cent to £2.3billion in the six months to September 30 – shares dropped 5.35 per cent or 23.8p to 421.4p.
CAB Payments gained 3.08 per cent or 1.9p to 63.5p following reports that a senior executive called a former top-20 investor to reassure them that the company would meet its revised forecasts.
Oliver Brown, a fund manager at RC Brown, said the London-listed firm was ‘absolutely adamant that they are not going to have another profit warning [in 2023]’.
The group, which specialises in money transfers to emerging markets, plunged 72 per cent in a single day last month after warning its revenues for this year should be far worse than expected.
Kier Group suffered its third shareholder revolt over fatcat pay in as many years as 39pc of investors at its AGM voted against the remuneration policy.
Shares in the construction group slid 0.57 per cent or 0.6p to 105.4p.
Nearly a fifth of Wetherspoon shareholders at its AGM voted against the re-election of the pub chain’s boss Tim Martin. Shares fell 5.88 per cent or 43.5p to 696.5p.
There was better news for Aviva after the insurer’s written premiums rose 13 per cent to £8billion in the three months to September 30.
It added that weather-related claims had increased but remain within expectations following wildfires and flooding in Canada alongside storms Babet and Ciaran in the UK. Shares fell 0.24 per cent or 1p to 413p.
