Market report: Iran clampdown fuels oil price rise and lifts producers’ shares

Michael Bow

Soaring oil prices kept the blue-chip index in positive territory on Tuesday after a clampdown on Iranian exports gave the market a post-bank holiday boost.

Price for the black stuff hit a six-month high of $74 a barrel after US secretary of state Mike Pompeo promised to end waivers permitting Iranian exports to eight countries on May 2, which will cut supply on the global market.

Two other big producers, Venezuela and Libya, also face production problems but noises from US authorities suggest they think slack will be taken up by other oil producing giants, such as Saudi Arabia and America itself.

However, the Iran move conjured up images of oil markets slowing from a gush into a trickle, sending the Footsie’s biggest constituent, Shell, up 49.50p at 2516p on expectations it can sell its stock-in-trade for slightly more dosh. BP, another major producer, also rose 11.09p to 578.79p

The outsized influence of the duo helped propel the FTSE 100 to its highest level since early October 2018, up 29.10 points to 7488.98.

On the flipside, carriers like easyJet and British Airways-owner IAG lost altitude due to expectations of higher fuel prices for airlines. Budget carrer easyJet lost 45p at 1174, a drop of 3.7%, while IAG was down 2.69%, shedding 15p to 542p.

Across Europe, airlines also suffered similar oil-related woes with Ryanair, KLM France and Lufthansa also falling by low single-digits.

Video games group Keywords Studios, which makes the picks and shovels for video game producers including Fortnite maker Epic, struck a small sub-£1 million deal to buy Japanese company Wizcorp.

The takeover for the mobile gaming specialist, which employs 35 people in Tokyo, should help Keywords’ standing in the Japanese market, Jefferies analysts said. The deal, which came on the back of promising results for the company two weeks ago, sent shares up 4p to 1474p.

Scottish broadcaster STV, which hosts its annual meeting in Glasgow today, shrugged off pressures in the advertising market to promise rising revenues. Shares fell 7.4p at 375.1p.

The company, which broadcasts Bafta-nominated drama The Durrells, said revenues would be up 1% to 2% due to a surge in regional advertising. Its STV Growth Fund is working with 130 Scottish advertisers, 50% of whom have never advertised on TV before, boosting regional advertising by nearly a third.