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Oil prices soared higher after one of the world’s largest container ships ran aground in the Suez Canal, blocking the major trade artery.
While equity markets were largely quiet on Wednesday, global energy trading went into a frenzy as fears the blockage could disrupt shipment for days sparked speculation that oil supply could be put under pressure.
Edward Moya, senior market analyst at OANDA, said: “Energy traders were trying to get a quick assessment on how long will a massive container ship block one of the world’s busiest waterways.
“Oil rallied on fears that the stranded ship could be stuck for days, then pared gains after it seemed canal traffic would resume imminently, eventually settling near session highs after news that traffic should resume later today or by Thursday.”
The price of Brent crude oil increased by 5.77% to 64.3 dollars per barrel.
Meanwhile, Europe’s largest stock markets continued to feel a drag as coronavirus cases continue to rise on the continent.
London stocks were the most resilient, pushing marginally higher as the bullish rise in oil and copper prices buoyed BP, Royal Dutch Shell, Rio Tinto, Glencore and Anglo American.
The FTSE 100 closed 13.7 points, or 0.2%, higher at 6,712.89 on Wednesday.
Elsewhere, the German Dax decreased by 0.35% and the French Cac moved 0.03% higher.
Across the Atlantic, the Dow Jones moved higher on the bell after the flash reading of services and manufacturing data showed both improved significantly on the previous month, boosting positivity around economic recovery.
Meanwhile, sterling lost pace against the dollar and euro after traders were caught off guard by a slump in inflation to 0.4%, with experts having forecast a rise to 0.8% for the month.
The pound decreased by 0.26% versus the US dollar to 1.371 and was down 0.07% against the euro at 1.159.
In company news, Jackpotjoy owner Gamesys jumped in value after it agreed the “key terms” of a takeover deal from US casino operator Bally’s.
Bally’s Corporation, which operates casinos and racetracks in the US, said Gamesys shareholders would receive 1,850 pence per share in the move, which could value the London firm at more than £2 billion.
Shares in Gamesys closed 302p higher at 1,944p as a result.
FTSE 250 IT firm Softcat also made major gains after it revealed that the pandemic helped to spark rises in profit and revenues in the second half of the year.
The company said its gross profits increased by a fifth to £134.5 million after a 10% increase in revenues to £577 million for the six months to January.
Shares were 226p higher at 1,785p at the close of play on Wednesday.
Housebuilder Bellway closed 79p lower at 3,413p after its first-half pre-tax profit fell despite higher revenue for the period.
The biggest risers on the FTSE 100 were IAG, up 7.45p at 194.8p, Kingfisher, up 10p at 325p, Whitbread, up 101p at 3,348p, and British Land, up 13.2p at 514.2p.
The biggest fallers on the FTSE 100 were Taylor Wimpey, down 5.7p at 178.15p, Just Eat Takeaway, down 202p at 6,660p, Scottish Mortgage Investment Trust, down 31p at 1,122p, and London Stock Exchange Group, down 180p at 7,080p.