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Wednesday, December 1, 2021

Oil companies lead FTSE lower as crude prices fall

By Liisa Tuhkanen

LONDON (Reuters) – The FTSE 100 edged slightly lower on Friday, with a decline for commodities stocks, such as BP and Royal Dutch Shell, overshadowing gains in travel group TUI.

The blue-chip FTSE 100 index eased 0.2 percent by 1111 GMT after a near-flat close of 6,568.33 points on Thursday.

Oil producers and oilfield service providers led the losers as U.S. crude oil prices dropped to their lowest in almost 6-1/2 years, with huge stockpiles and refinery shutdowns heightening concerns about global oversupply.

Royal Dutch Shell, Weir Group and Tullow Oil all declined about 1 percent, in line with the FTSE 350 Oil & Gas Financial index.

BP slid the most, down 1.3 percent, after a U.S. judge on Thursday found that it manipulated the natural gas market in 2008, as alleged by the U.S. energy regulator.

“Ultimately, the commodities market does remain under pressure,” London Capital Group analyst Brenda Kelly said.

On the upside, TUI was the biggest blue-chip gainer after JP Morgan and Jefferies lifted their target price on the stock, sending the price up 2.7 percent after a jump in the previous session when it forecast earnings at the top end of analysts’ expectations. [ID;nL5N10O0QV]

Among other individual gainers, chipmaker Arm Holdings rose 0.7 percent.

“ARM’s equity story will continue to be one based on strong top-line growth contributing to sector-leading earnings and cash flow growth,” Barclays wrote in a note.

“We see both near- and long-term prospects being as strong as ever, although recent concerns around end market growth have caused a material underperformance for ARM shares.”

The FTSE 100 rose to a record 7,122.74 points in late April but has since given up most of the gains it made in 2015.

(Editing by Louise Ireland)

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