Oil rally lifts FTSE 100 above 7,100 for first time since May 10

Though it didn’t quite match yesterday’s growth, the FTSE 100’s early gains still lifted it to a recent high.

Up 0.3%, the UK index is now above 7,100 for the first time since May 10 and is around 70 points from matching the then-14-month peak struck on that date.

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“The FTSE 100 built on yesterday’s strong performance to trade solidly higher on Wednesday morning, lifted by rising oil prices which boosted the big energy firms on the index, BP and Shell,” says Danni Hewson, financial analyst at AJ Bell.

“An upbeat assessment of demand from producers’ cartel OPEC and the waning prospect of a big increase in Iranian supply have helped support a rally in crude prices. Something which could make the market a little nervous if it is sustained given investors’ current preoccupation with inflation risks.”

Connor Campbell, financial analyst at Spreadex added: “Looking at the trading landscape this Wednesday, however, and a low energy open may make it difficult for the FTSE to significantly make strides towards those levels.”

“The DAX and CAC, for example, both started the session flat following a far worse than forecast German retail sales reading, while the Dow Jones is heading for a similarly sluggish performance this afternoon,” Campbell said.

Wednesday could be a day where the markets tread water, saving their energies for the US jobs focused sessions on Thursday and Friday, which bring the unemployment claims and latest non-farm payroll data respectively.

FTSE 100 Top Movers

Burberry (3.44%), British Land Company (2.16%) and Land Securities (1.82%) were the top risers on the FTSE 100 during the morning session.

At the bottom end, Kingfisher (-2.32%), Aviva Group (-1.72%) and Antofagasta (-1.63%) each lost ground on Wednesday morning.

Oil

Brent crude oil surged past $70 per barrel for the first time since March on Tuesday.

The news comes as OPEC+ stayed true to their plan of releasing more barrels of oil into an improving market.

The benchmark for oil used across the world now stands at $70.78, as OPEC+ producers, headed up by Russia and Saudi Arabia, said they were restricting output as there are a number of uncertainties at play. This is despite there being an increase in demand globally.

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