Energy shares boost FTSE 100

The FTSE 100 closed 1.16 per cent up on Tuesday evening.

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By :  ,  Financial Analyst

The FTSE 100 closed on Tuesday (December 2nd) evening at 1.16 per cent thanks to a boost in energy shares.

Tullow Oil, BP and Royal Dutch Shell "A" all recorded gains over the course of the day. Tullow enjoyed the best performance throughout the day with shares growing by 5.8 per cent while BP and Royal Dutch Shell reported increase of 4.9 per cent and 4.1 per cent respectively.

These positive figures were helped by the rebounding oil prices across the day but there was disappointment by the close of trading as Brent crude slipped 0.8 per cent to $71.72 (£45.83) a barrel. The performance of the oil companies pulled the FTSE 100 to a benchmark index of 6,733.84, which represents a boost of 77.47 points.

Oil prices have been the main focus for many economies in recent weeks. Nations such as Russia are feeling the pinch from a drop in prices. The country relies heavily on revenues from oil exports and is very sensitive to change in the markets.

Russia saw the rouble suffer its largest one-day fall since 1998 on Monday (December 1st) while the government warned of a potential recession next year if conditions did not improve. The economic development ministry estimates that the economy will contract by 0.8 per cent next year, down from the previous prediction of a 1.2 per cent growth.

The country was given some respite after the Organization of Petroleum Exporting Countries (Opec) decided against a drop in production and agreed to keep it at its current level.

For the FTSE 100, there was a number of major changes with Friends Life shares growing by 2.4 per cent following Aviva agreeing to purchase the company for £5.6 billion. Aviva also saw shares grow by 0.1 per cent. Royal Mail saw a 2.6 per cent dip in shares after regulator Ofcom stated that the universal postal service was not under threat.

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