Rising oil prices boost UK shares - London Report

BRITAIN’S top equity index closed slightly higher after setting a three-week low yesterday, with Royal Mail gaining on the prospect of lower competition and energy shares tracking a rise in oil prices.

Royal Mail led the blue-chip FTSE 100 index, with the company’s shares rising 5.3 per cent after Dutch rival PostNL abandoned talks with LDC on plans to expand PostNL’s Whistl unit in Britain.

Among top sectoral gainers, the UK Oil and Gas index rose 0.6 per cent after crude oil prices hit a five-month high on a weaker dollar and on signs that US production had eased and refinery demand had picked up.

“Stronger oil prices have provided some support to the energy sector, while yesterday’s strong market sell-off will have tempted investors to look for bargains,” Augustin Eden, analyst at Accendo Markets, said.

“On a company level, Royal Dutch Shell’s move to maintain its dividend added to relatively good performance in its downstream operations to negate a fall in profits and put it in line with sector peers.”

Shares in Royal Dutch Shell rose 0.4 per cent after it reported stronger than expected profits thanks to refining, which proved valuable in the recent oil price downturn, joining a trend set by rivals BP and Total earlier this week.

The FTSE 100 index, which hit an all-time high of 7,122.74 on 27 April, closed 0.2 per cent higher at 6,960.63.