Oil companies push Footsie higher

Oil giants BP and Royal Dutch Shell pushed the London market higher today after oil prices rose to a record high.

The cost of a barrel of crude hit 62.30 US dollars in New York overnight amid concerns sparked by the death of Saudi Arabia’s King Fahd and refinery fires.

Although the price fell back to 61.04 US dollars today, Shell was still the highest FTSE 100 Index riser with an increase of more than 1% or 1.25p to 89.5p.

This contributed to the Footsie rising 17.7 points to 5308.5 by mid-morning, shrugging off the impact of a weak session on Wall Street. Traders also had the prospect of a quarter point rate reduction on Thursday on their minds.

BP was another beneficiary of the high oil price, standing 3p higher at 628p.

However, the mood was more downbeat among companies reporting today. Banking group Alliance & Leicester fell 1% despite news that core operating profits rose £1 million to £263 million, beating analysts’ expectations. Shares fell 10p to 874p.

Other fallers in the sector included Lloyds TSB slipping 1.5p to 487p and Northern Rock off 2.5p to 823p.

Industrial gases group BOC also disappointed the market with a 9% fall in profits to £118.9 million in the three months to June 30, lower than City forecasts. The stock retreated 4p to 1067p.

Elsewhere, Imperial Leather soap maker PZ Cussons was the heaviest FTSE 250 faller after the impact of high oil prices on key packaging materials contributed to flat annual profits. Shares fell 4% or 55p to 1195p.

And a number of housebuilders were in the red after Ben Bailey reported an 18% fall in half year pre-tax profits. Its shares weakened 13%, down 57.5p to 382.5p, after it said a slowdown in the second hand housing market led to uncertainty among prospective buyers.

This had an impact on a string of others in the sector including Countrywide, off 12.5p to 322.5p and Taylor Woodrow, down 7.25p to 332.25p.