Oil companies were among the biggest risers in the FTSE 100 as fading hopes of a ceasefire in Ukraine drove crude prices higher.
Shares in BP climbed 4 per cent, or 14.6p, to 375p and Shell gained 4 per cent, or 78.7p, to 2020.5p after the cost of Brent crude hit $115 a barrel.
Mid-cap oil firms also received a boost, with FTSE 250 group Capricorn Energy rising 3.9 per cent, or 8p, to 213.6p while Harbour Energy shot up 2.3 per cent, or 9.8p, to 436.4p.
Pumped up: Shares in BP climbed 4% and Shell gained 4% after the cost of Brent crude hit $115 a barrel. Mid-cap oil firms also received a boost
The rise came as pessimism grew about the possibility of a breakthrough in peace talks between Ukraine and Russia.
The chances of a deal further receded after Ukraine refused to surrender the key port city of Mariupol to Russian forces despite a devastating siege.
Meanwhile, discussions around a possible ban on Russian oil by the EU, following similar action taken by the US, added to market jitters over supply.
‘With the possibility that more than a million barrels of Russian oil a day will be snubbed, given that the Netherlands and Germany combined received around a quarter of Russia’s crude and light oil exports, demand would shoot up for crude supplies from Opec nations,’ said Hargreaves Lansdown analyst Susannah Streeter.
‘But the problem is that even now they aren’t coming up with the goods, as the cartel missed a daily production target by more than a million barrels in February, with US oil rigs not yet able to take up the slack.’
An attack on a Saudi Arabian refinery by rebels in Yemen over the weekend also raised fears of disruption.
A renewed increase in fuel costs threatens to cause more pain for Britain’s motorists, with petrol and diesel prices hitting fresh records over the weekend.
Rising prices at the pump have piled pressure on Chancellor Rishi Sunak ahead of tomorrow’s Spring Statement, in which he is expected to announce a cut to fuel duty to help tackle the growing cost of living crisis.
Stock Watch – Keywords Studios
Keywords Studios slipped after its chief operating officer stepped down ‘due to personal circumstances’.
Sonia Sedler has left the computer game services group with immediate effect after taking the job in January last year. Keywords did not announce a replacement for Sedler after her departure.
Her exit also came ahead of the company’s full-year results, which are due to be published next Wednesday.
The shares were down 2.4 per cent, or 56p, to 2262p.
The prospect of higher fuel prices also weighed on airline stocks, with British Airways-owner IAG down 1 per cent, or 1.48p, to 140.44p, Wizz Air lost 2.1 per cent, or 57p, to 2638p and Easyjet slumped 3.4 per cent, or 18.2p, to 520.4p.
The FTSE 100 was up 0.5 per cent, or 37.66 points, at 7442.39 while the FTSE 250 slipped 0.7 per cent, or 150.06 points, at 21006.56.
Aside from the oil companies, miners helped boost the blue-chip index as the war in Ukraine kept commodity prices elevated.
The trend was supported by a ban on aluminium ore exports to Russia by Australia as a result of its invasion of Ukraine. The move sent prices of the metal surging.
Anglo American was up 6.1 per cent, or 225.5p, at 3910p, Rio Tinto added 3.3 per cent, or 183p, to 5804p and Glencore climbed 3.8 per cent, or 18.3p, to 497.5p.
Tullow Oil rose 9.9 per cent, or 4.71p, to 52.44p after investing £90million to expand its stake in several oilfields in Ghana.
The group increased its ownership in the Jubilee and TEN fields to 38.9 per cent and 54.8pc respectively, adding around 5,000 barrels of oil to its daily production.
Online trading platform Plus 500 expanded into the Japanese market by snapping up Tokyo-based EZ Invest Securities for an undisclosed sum.
The acquisition was considered a major growth opportunity for the FTSE 100 firm and came just months after it entered the US market. Plus 500 shares dipped 0.5 per cent, or 6.5p, to 1452p.
AIM-listed Alliance Pharma got a small boost after it confirmed it was in talks to acquire two products in the US.
The firm flagged that any deal would be worth no more than £15.2million but there was no certainty the purchase would take place. Alliance shares, however, edged down 0.2 per cent, or 0.2p, to 111.4p.
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