The FTSE 100 started the week with a spring in its step after OPEC+ cut production and sent oil prices higher.
The FTSE 100 was 0.47% higher at the time of writing and built on gains at the end of last week.
As expected, OPEC+ cut production over the weekend in an effort to support oil prices. The cartel will cut production by a reported 1.4m barrels of oil per day.
“Saudi Arabia’s pledge to cut output suggests it wants to see an oil price above $80 per barrel and that it is concerned about the demand implications of a global economic downturn. The FTSE 100 was up 0.5% in early trading, extending the gains seen on Friday after the non-farm payrolls data from the US,” said AJ Bell investment director Russ Mould.
With the move to cut production largely signposted, the gains in oil were contained.
Oil prices started the European session considerably higher before falling back. Although OPEC’s decision will bring supply out of the market, there are ongoing concerns global demand could decline towards the end of the year.
FTSE 100 movers
BP and Shell added a material number of points to the FTSE 100 as investors reacted to OPEC+ cuts. Both oil majors are off the highest levels of 2023 after tracking underlying energy prices lower. Investors in oil majors will welcome the OPEC+ decision to cut production.
Vodafone was over 3% higher as the beaten-down telecom stock picked up from the worst levels for some years.
Abrdn was the FTSE 100s top gainer as the investment manager kicked off a share repurchase programme.
Miners were weaker after a storming session on Friday.