Britain’s top share index has risen in choppy trade, with oil shares holding on to gains after news that some oil producing countries were cooperating to tackle a supply glut.
The energy sector contributed over 10 points to the FTSE 100, which was up 0.7 per cent at 5,862.17 points at the close on Tuesday.
But oil shares as well as the index as a whole gave up some gains along with the price of Brent crude after a meeting of oil ministers from Saudi Arabia, Russia, Qatar and Venezuela produced only the promise of a freeze, not a cut, in supply.
The deal was also contingent on other producers joining in.
“All they’ve agreed to is not increasing output, and that doesn’t include Iran,” said Alastair McCaig, market analyst at IG.
Azerbaijan has also said it has no plans to freeze production.
“People are hopeful when they hear this talk of output freezes, but it’s already now looking as if that’s not going to happen,” said Augustin Eden, research analyst at Accendo Markets.
BP was up 1.4 per cent, having been as much as 4.6 per cent higher, while Royal Dutch Shell rose 1.6 per cent.
Goldman reinstated coverage of Shell with a “buy” rating, and estimated that Brent would recover to $US62 a barrel by 2017.
Miners pared earlier losses as the price of copper advanced following positive yuan loan data from China, which suggested that Beijing is keeping monetary policy loose to counter a protracted economic slowdown.
Anglo American advanced 1.2 per cent in volatile trade, having gained as much as 7.7 per cent in early deals, after delivering results that beat consensus estimates, adding that it would sell its iron ore unit.
The stock has rallied around 80 per cent since late January.
The biggest loser on the index was Standard Chartered, falling 5.3 per cent after two brokers cut their rating on the stock, citing other bank options that offer greater certainty.