OIL stocks were again on the rise as investors focused on tight energy supplies amid the volatility gripping markets.
Brent crude traded at around $105 a barrel as it rebounded from a recent slump that saw its price drop below $100 for the first time since April.
North Sea-focused Harbour Energy was one of the strongest risers, up 2.3pc, or 7.3p, to 326.3p.
BP gained 0.7pc, or 2.65p, to 387.9p and rival Shell climbed 0.2pc, or 4.5p to 2038p.
Mid-cap energy stocks benefited from the rebound in crude, with Tullow Oil rising 4.3pc, or 1.82p, to 43.82p and Energean adding 2.8pc, or 27.5p, to 998p.
Firms with ties to the sector also performed well, with oil rig builder Petrofac up 2.9pc, or 3.2p, to 112.7p and engineer Wood Group gaining 1.6pc, or 2.45p, to 155.3p.
Oil and gas prices have surged in the wake of the war in Ukraine as sanctions by western countries severely restricted supplies from Russia, one of the world’s largest energy producers. That has been exacerbated by a recovery in demand following the pandemic, leaving countries and businesses scrambling to keep the lights on.
The surge has resulted in handsome profits for oil and gas firms. But this has drawn criticism as price rises have left UK households with crippling energy bills.
Higher energy prices also show little sign of abating, with broker Jefferies hiking their forecasts.
Analysts predicted crude would remain at just over $105 a barrel at the end of 2022, up from their previous estimate of around $91.
The FTSE 100 dipped 0.1pc, or 9.07 points, to 7180.01 while the FTSE 250 was up 0.2pc, or 32.54 points, at 18.908.07. Markets continued to swing wildly amid jitters about a global recession despite hopes aggressive action by central banks could bring inflation back under control.
Traders were also keeping one eye on machinations at Westminster as the campaign to succeed Boris Johnson began to pick up steam, although Hargreaves Lansdown analyst Sophie Lund-Yates said the Prime Minister’s resignation ‘hasn’t been viewed as a catastrophe’ by the City.
Asian markets initially posted strong gains but closed mostly flat after former Japanese Prime Minister Shinzo Abe was assassinated in the city of Nara.
However, there was some good news from the latest US employment data, which saw 372,000 jobs added to the economy in June, much better than expected despite interest rate hikes from the Fed and some companies warning of redundancies.
Aircraft engine maker Rolls-Royce rose 2.1pc, or 1.76p, to 87.02p after boss Warren East said the firm was seeing a faster than expected rebound in demand in engines for large passenger aircraft.
Recession worries weighed on some banking stocks, with Standard Chartered down 2.6pc, or 15.4p, at 581.6p, HSBC losing 1.5pc, or 8.2p, to 527.4p and Lloyds sliding 0.2pc, or 0.01p, to 42.22p.
But NatWest rose 0.3pc, or 0.6p, to 218.9p while Barclays rose 0.9pc, or 1.3p, to 152.36p.
Mining firms had mixed fortunes amid fears a slowdown in the economy will dent demand for commodities such as iron ore and copper.
Anglo American rose 0.3pc, or 8.5p, to 2825.5p while Rio Tinto shed 0.1pc, or 6p, to 4854p, Glencore sank 0.5pc, or 2.05p, to 431.2p and Antofagasta eased 0.7pc, or 7.5p, to 1109p.
Fellow digger BHP slumped 1.9pc, or 42p, to 2206.5p after it lost an appeal to block a £5bn lawsuit connected to the collapse of a dam in Brazil in 2015. The incident killed 19 people and triggered the worse environmental disaster in the country’s history.
Meanwhile, troubled lender Amigo fell 7.4pc, or 0.36p, to 4.5p after its boss Gary Jennison said the firm had ‘learnt the lessons of the past’ as it looked to draw a line under a mis-selling scandal that left it on the brink of collapse.
Amigo also reported a profit of £170m for the year to the end of March.