News

November 08, 2008

That Was The Week That Was ... In The UK Oil Equities Markets

By Daniel O’Sullivan

We’ve noted this phenomenon a couple of weeks in a row already, but the fact we’re doing so again is itself evidence of a trend: as we’ve already said, perhaps of some kind of floor has been found for the sector. At the end of the week, benchmark NYMEX crude was barely holding onto US$60 per barrel, so you could hardly see it as having been a good week for oil price bulls - yet nevertheless, the quoted sector again closed up, with the FTSE350 producers as a whole rising two per cent. Likewise, BP closed the week up almost two per cent at 515p, while Royal Dutch Shell finished just over two per cent up at 1,693p. BG Group was again the outperformer among the large integrated majors, closing the week up seven per cent at 980p on a set of cracking third quarter results which highlighted just how badly the company had been oversold recently.

Among the most notable main board gainers were JKX Oil & Gas, which finished the week up 21 per cent at 184p, and Hardy Oil & Gas which closed up 18 per cent at 225p. Here we can discern the manic depressive nature of the market’s current mental disposition, as both these stocks have been hammered down and then picked up, then hammered down again and then picked up again in recent weeks. In Hardy’s case it would be easy to say the uptick was due to an interim management statement - anyone...