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5pm: Oil up as inflation worries persist

Soaring oil prices fuelled inflation worries, though the FTSE 100 was spared some pain as a weaker pound provided some cushioning for the internationally-exposed index which dipped 35.3 points to close at 7,028.10.

Brent oil traded above $80 a barrel on Tuesday, settling at $79 at the close of London’s equity market. Nonetheless, oil majors climbed. Royal Dutch Shell ‘A’ and ‘B’ shares ended up 2.8% and 2.3% respectively, while BP closed up 1.6%.

OPEC said it expects oil demand to rise between now and 2045, and remain the dominant source of energy despite warnings that it must fall to combat climate change.

“Energy and oil demand have picked up significantly in 2021, after the massive drop in 2020, and continued expansion is forecast for the longer-term,” OPEC chief Mohammad Barkindo said in the group’s World Oil Outlook.

Commenting on the dip in equity markets, Danni Hewson, AJ Bell financial analyst, said: “The thing about rising inflation and supply pressures is that eventually all that talk, all the numbers actually make a real-life impact with the consumer.