FTSE 100: Petrol crisis lifts BP and Shell and sends Brent Crude to 3-year high

Brent crude hit a three-year high at near to $80 a barrel today, heaping more inflationary pressure on the UK economy and adding to the turmoil for beleaguered motorists.

The price of Brent lifted 1.5% to $79.23 and has risen for five sessions in a row, driven by the global economic recovery and the natural gas shortage pushing demand for oil instead.

Goldman Sachs today raised its year-end forecast for Brent crude by $10 to $90 a barrel as the US bank also factors in an ongoing production hit from Hurricane Ida last month.

The rising price outlook helped shares in BP and Royal Dutch Shell to improve by 2%, with the latter now trading at its highest level since the pandemic struck in March 2020.

Their performances underpinned a resolute performance by the FTSE 100 index, which climbed 24.41 points to 7,075.89. European markets were also higher after Germany's election delivered a result that was much closer than opinion polls had predicted.

Coalition negotiations are expected to take weeks if not months, meaning many of the more extreme policy proposals from all parties are likely to be watered down.

Evergrande's debt problems also remain in the background, although an absence of major developments over the weekend triggered some buying of Asia-focused stocks.

They included insurer Prudential, which rose 2% after revealing it expects to secure about $2.4 billion (£1.75 billion) following the pricing of new shares in its Hong Kong fundraising.

The biggest rise of the session came from Rolls-Royce as it unveiled a major deal with the US Air Force to power the B-52 bomber for the next 30 years. Shares have risen 29% in a week, including today's 7% surge of 9.5p to an 18-month high of 142.04p.

The improved global travel outlook behind the recent resurgence of Rolls is also helping British Airways owner IAG, which added 4% or 7.6p to 183.2p.

The FTSE 250 index was 32.52 points higher at 23.641.48, with investors continuing to see value in Cineworld as the cinema chain surged 8% or 6.3p to 77.8p.

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