Oil prices slip on improved Saudi production while FTSE 100 dips
The price of oil sank after Saudi Arabia said it had made more progress over oil production, while the European markets remained subdued.
The FTSE 100 nudged lower as it closed 18 points down at 7,408.21 at the end of trading on Monday.
Saudi Arabia said the speed of oil production is back to the same rate as before Saudi Aramco oil facilities were struck in a drone attack on September 14, reducing fears over supply levels and pressing down on prices.
The price of a barrel of Brent crude oil slumped by 2.63% to 60.26 US dollars.
The European markets welcomed a calmer day for international trade tensions and also rose on the back of currency weakness.
David Madden, market analyst at CMC Markets UK, said: “Stocks are largely positive as we approach the close as traders are a little less fearful about the US-China trade situation.
“The announcement from Peter Navarro that de-listing Chinese firms was ‘fake news’ has encouraged traders to pick-up stocks as this puts the US-China trade relationship back on positive footing. Traders are optimistic about next week’s trade negotiations.”
The German Dax increased by 0.38% while the French Cac moved 0.66% higher.
The Dow Jones opened in the black, pushing higher after the promising trade comments by economist Mr Navarro, as traders became more optimistic over relations with China.
The value of the pound edged higher against the dollar and euro as it was encouraged by a higher revision of GDP for the first quarter of 2019.
It also benefited from weakness in the euro, as traders became more concerned over inflation in Germany.
The pound was 0.1% up versus the US dollar at 1.230 and down 0.44% against the euro at 1.127.
In company news, Premier Inn owner Whitbread was one of the FTSE 100’s biggest fallers, as investors were spooked by Barclays decision to downgrade the hospitality business.
The company’s stock has fallen in value by almost 10% over the past year, after it warned of Brexit uncertainty and growing competition for hotel rooms in the UK.
Shares in Whitbread closed 173p lower to 4,294p at the end of trading.
Woodford Patient Capital Trust saw shares rise after the fund warned celebrity stock picker Neil Woodford that he might be shown the door from the business bearing his own name.
The board of the listed trust said it was speaking to other fund managers to potentially replace Mr Woodford, as it revealed that the value of the fund fell 20.9% between June 28 and September 26 to £591 million.
Shares in Woodford Patient Capital Trust finished Monday’s session up 0.9p to 44.9p.
Metro Bank shares moved higher after reports that activist investor Elliott Advisors are considering buying a stake in the troubled lender.
Shares in the troubled bank rose 7.3p to 200p.
Weakness in the underlying sliver market weighed down on Fresnillo, although UBS also raised its target price in the silver miner.
Fresnillo saw shares slip 19.4p to 683.6p at the close of play.
The biggest risers on the FTSE 100 were Imperial Brands, up 53.6p at 1,828.2p, British American Tobacco, up 62.5p at 3,007.5p, JD Sports, up 15.2p at 751.4p, and WPP, up 18.6p at 1,018p.
The biggest fallers on the index were Reckitt Benckiser, down 262p at 6,344p, Whitbread, down 173p at 4,294p, Fresnillo, down 19.4p to 683.6p, and NMC Health, down 62p at 2,710p.