Oil majors gave the London market a boost on Wednesday as crude prices spurted on news from the industry.
The FTSE 100 Index lifted 46.22 points to 6372 in early trading, underpinned by a 7.9p rise in BP (LON:BP.) shares to 386p and a 42p gain to 1808.5p for Royal Dutch Shell (LON:RDSB).
The price of a barrel of Brent crude increased 1.5% to US$52.7 and US light crude bounced 2% to US$49.5 as Middle East oil cartel OPEC and Shell said operational and investment reduction would lead to price rises and spikes.
US industry data also showed stockpile drawdowns, implying less US production, while geopolitical risk in the Middle East raised fears of supply disruption.
But Mike van Dulken at Accendo Markets said: "US EIA stockpile data today is seen showing another build which could cap gains, while the IMF growth warning does not exactly promote strong consumption trends from emerging markets."
The price rises were bad news for big fuel users such as airlines. British Airways and Iberia owner IAG (LON:IAG) flew 28.5p lower to 558p, Easyjet (LON:EZJ) descended 100p to 1660p and Ryanair dipped €0.43 to €12.77.
In the UK, figures from the Office for National Statistics showed manufacturing output falling 0.8% in August compared with the same month a year ago.
In corporate news, SABMiller (LON:SAB) frothed up 72.5p to 3694.5p on news of a revised US$104bn bid for the Peroni brewer from rival Anheuser-Busch InBev.
Investors checked out of supermarket group Tesco (LON:TSCO) by 1.4p to 190.75p as it posted operating profits of £354mln in the first six months of the year, compared to £916mln in 2014, a drop of some 55%.
The beleaguered supermarket giant did manage a small pre-tax profit of £74mln, from a loss the previous year.
Gemfields (LON:GEM) dimmed 2.25p to 57.25p as the precious stone producer reported record sales but lower-than-expected annual profits.
MARKET PREVIEW
London’s blue chips are set to open level when trading gets underway according to financial spread bet firms, though Asian markets were weakening near their close.
FTSE 100 is tipped to open a couple of points higher, but after the rises in Asia the dial may move higher nearer the bell.
London’s mood will be dominated by Tesco’s half year results, with poor numbers expected but hope for at last some chinks of light in chief executive Dave Lewis’s outlook statement.
Footsie added 27 to 6,326 on Tuesday.
Similar gains were seen on the Dow Jones Industrial Average, which added 214 overnight to 16,790, though Nasdaq and the S&P 500 eased lower.
Asian markets were the best performers led by Hong Kong, but early gains were being eroded nearer the close.
Japan weakened near the end of the trading day after bank of Japan kept its monetary stimulus measures unchanged.
Tesco’s interim results are expected to show another dip in underlying profits to around £400mln.
A mega-bid for SABMiIler is also on the way according to reports overnight.