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Oil prices push higher ahead of key cartel meeting

The Organisation of the Petroleum Exporting Countries is due to decide on production this week.


Oil prices have been volatile recently (Danny Lawson/PA)

Oil prices have been volatile recently (Danny Lawson/PA)

Oil prices have been volatile recently (Danny Lawson/PA)

Oil prices surged at the start of the week ahead of a key meeting of the Organisation of the Petroleum Exporting Countries (Opec).

Towards the end of the session, Brent crude was up 2% to 74.452 US dollars.

The price rise came after the news that Venezuela has started shutting down oil production, and after China included energy imports in its list of tariffs against the US.

However, Opec members are set to meet on Thursday, setting the stage for more volatility.

Ken Odeluga, market analyst at City Index, said: “China’s surprise inclusion of US energy imports among possible new tariffs also trains the spotlight on oil. The decision was out of the blue as energy products were not on a list of potential duties China previously announced.

“Hence the move triggers fresh price uncertainty, just as Opec and other producing countries are expected to agree an end to their 17-month production cut this week.”

Markets across Europe were off to a slow start for the week, with the FTSE 100 edging down 0.03% or 2.58 points to 7631.33 points.

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The Dax in Germany was hit due to fears over the future of Angela Merkel’s government. The index fell 1.36% or 176.44 points to 12834.

The Cac 40 in France was also down, falling by 0.93% towards the end of trading.

In currency markets, the pound was flat against the euro, and fell 0.26% against the US dollar to 1.324 after data pointed to a cooling in UK house prices.

The data from Rightmove showed asking prices crept up by 0.4% in June, having grown by 0.8% in May. The average price for a home in Britain reached £309,439.

Shares in both CYBG and Virgin Money fell on Monday as the two agreed terms for a £1.7 billion takeover deal.

The owner of the Clydesdale Bank, Yorkshire Bank and B brands said the terms of the agreement will see each Virgin Money share exchanged for 1.2125 shares in the new combined group, which will gradually be re-branded under the Virgin Money banner.

Shares in CYBG fell by 0.72% or 2.2p to 304p, while Virgin Money’s shares dropped 2.17% or 7.7p to 347.3p.

The Sainsbury’s-Asda merger was in the spotlight again on Monday after the Competition and Markets Authority (CMA) published a summary of responses to the tie-up.

The respondents, which included supermarket rivals and suppliers, suggested the £12 billion deal could result in higher prices and reduced choice for consumers.

Sainsbury’s shares closed the day down 0.13% or 0.4p to 310p.

The competition watchdog also raised concerns over a planned merger between two specialist service providers that stock washrooms across the UK.

The CMA said a merger between Rentokil Initial and Cannon could result in a “substantial” reduction in competition, and warned the deal was at risk of an in-depth probe if the companies did not address the regulator’s concerns.

Rentokil’s shares edged down 0.09% or 0.3p to 349.9p by the market close.

The biggest risers on the FTSE 100 were RSA Insurance Group up 15.8p to 667.8p, GVC Holdings up 23p to 1,028p, Micro Focus up 26.5p to 1,369.5p and Evraz up 8.6p to 538.2p.

The biggest fallers on the FTSE 100 were Ocado Group down 81p to 959p, DS Smith down 14.2p to 549.6p, Rolls-Royce down 22.6p to 927.4p and 3i Group down 18.4p to 953.4p.