FTSE falls below 4900 barrier

The London market was dragged back below the key 4900 barrier today as a fresh surge in oil prices triggered jitters among traders.

Fears over the potential impact of sky-high crude costs on oil-dependent companies helped send the FTSE 100 Index 21.6 points lower to 4892.4 by mid-morning.

An upbeat trading statement that added nearly 1% to BP’s market value was not enough to add momentum to the market.

BP advanced 4.5p to 556.5p after saying production for the whole year was expected to be in the range of 4.1 million to 4.2 million barrels a day, in line with guidance given in February.

Rival Shell also cheered half a penny to 476p as the cost of a barrel of crude oil hit a new peak of $57.79 in New York earlier in the session.

But the high price of crude did little favours for the rest of the market after cruise ship operator Carnival fell 49p to 2832p, British Airways eased 4.5p to 260.5p and gases group BOC slipped 2p to 1014p.

The financial sector was also helping pull the market lower, despite a resilient first quarter trading update from Northern Rock.

Northern stuck by profits forecasts but saw shares slip 5.5p to 792.5p, along with Barclays – down 5p at 545.5p – and HBOS, off 6p at 824p.