MARKET REPORT: BP and Shell can’t plug the holes as crude price falls

London’s two oil majors racked up a day of heavy losses as traders nervously eyed the oil market.

Oil prices tumbled after the biggest organisation of crude-producing countries, Opec+, failed on Sunday to reach a consensus about whether to extend the deep output cuts that have helped to buoy the market.

Prices crashed at the start of the year and fell as low as $19 a barrel as lockdowns took cars off the road, grounded flights and disrupted industry across the world.

Crude crash: Oil prices plummeted at the start of the year and fell as low as $19 a barrel as lockdowns took cars off the road, grounded flights and disrupted industry across the world

Although consumption has increased, winter lockdowns mean there has been an uneven recovery, with the US and Europe lagging behind Asia – which is making some Opec+ members think twice.

Brent crude was down 1.4 per cent last night, valuing a barrel of oil at $47.50 a barrel.

The group – which includes the likes of Saudi Arabia, Russia and Venezuela – is set to make a decision today on whether to lift production curbs in January that would flood the global market with an extra 2m barrels a day. 

BP fell 5.8 per cent, or 15.25p, to 247.65p, while Shell tumbled 5.4 per cent, or 69.8p, to 1234.2p.

The vaccine announcements also put a rocket under shares last month and the FTSE 100 soared by 12.4 per cent in November. 

Stock Watch – Eco Atlantic Oil & Gas

Energy tiddler Eco Atlantic Oil & Gas will be able to carry on exploring four areas off Namibia for fossil fuels.

The company renegotiated the 10-year licences with the African country’s government, which will hold a 10 per cent stake, while local Namibian business partners will own a 5 per cent share. 

Big industry players such as ExxonMobil have also been keen to explore Namibian waters.

Shares in AIM-listed Eco Atlantic rose 2.5 per cent, or 0.5p, to 20.5p yesterday.

But it fell by 1.6 per cent, or 101.39 points, to 6266.19 and these losses held it back from having its best month ever. Instead, this was its second best ever and the best in 31 years.

The FTSE All-Share index was also 12.4 per cent higher, though this was only its eighth-best month.

The positive data announced about three separate vaccines drove the November rally – one of which was from Moderna. 

Numbers released yesterday showed Moderna’s vaccine efficacy against Covid-19 is 94 per cent in general and 100 per cent effective in preventing severe Covid.

Although the Footsie might have missed out on reaching a record, crypto-currency bitcoin rose by as much as 8 per cent – surpassing $19,800 and edging closer to the much-vaunted $20,000 mark.

It was an eventful start to the week in Japan. The chief executive of the Tokyo Stock Exchange stepped down over a system outage that brought trading to a standstill for a full day in October.

Koichiro Miyahara said he felt responsible for the temporary failure, which was also an embarrassment for Fujitsu, which designed the trading system.

Unilever, owner of Marmite and Ben & Jerry’s, fell 0.3 per cent, or 15p, to 4,571p after it completed its legal move to London, undoing the dual UK-Dutch structure it operated under for almost a century.

WPP was hovering at the lower end of the blue-chip leaderboard, falling 3.2 per cent, or 23.8p, to 725.6p, after it offered to buy out the 38.5 per cent of its Australian arm that it does not already own for £111million.

The FTSE 250 index fell 0.7 per cent, or 126.39 points, to 19336.32.

Easyjet faltered – losing 4 per cent, or 33.4p, to 805.4p – despite offering passengers discounted Covid tests to encourage them to book flights. 

And government contractor Mitie tumbled 5.3 per cent, or 2.15p, to 38.1p after it was revealed over the weekend boss Phil Bentley sacked turnaround chief Karen Thomas-Bland just a few months after she was hired. 

Thomas-Bland was tasked with overseeing the £190million merger with Interserve’s facilities management arm – but was let go before it was due to formally complete yesterday.

Fellow outsourcer G4S also slipped – falling 3.1 per cent, or 7.1p, to 221p – as its long-running spat with potential buyer Garda World extended its takeover bid.

The Canadian security group will keep the £2.9billion offer open until mid-December – and hinted (again) that it would not be pressured into raising the 190p ‘full and fair’ price for G4S.

This post first appeared on Dailymail.co.uk