BP and Shell jump as soaring oil prices unleash fresh inflation risk - latest updates

 BP and Shell’s share prices jumped in early trading after oil prices rocketed in the wake of a shock cut to the world’s supply of crude.

The Saudi-led Opec consortium pledged to slash 1m barrels from daily production, starting next month. Brent crude jumped 5pc to $84 per barrel following the announcement, but Goldman Sachs said the risk was severe enough to send it as high as $100 by the end of 2024. 

BP and Shell both leapt 4pc higher as a result, and the FTSE 100 lifted 0.5pc to a three-week high. The broader energy sector was up 4.3pc, on track for its biggest daily gain in more than four months.

Opec’s decision to cut production by more than 1m barrels per day shocked markets, with economists warning the oil surge threatened to open a new front in the battle against inflation. Saudi Arabia pledged to slash 500,000 daily barrels alone.

The White House said the pledge to cut production was ill-advised, while adding the US would work with producers and consumers with a focus on gasoline prices. Last year, President Joe Biden ordered an unprecedented release from the nation’s strategic crude reserves after Russia invasion of Ukraine.

“Today’s move, like the October cut, can be read as another clear signal that Saudi Arabia and its Opec partners will seek to short circuit further macro selloffs,” RBC Capital Markets LLC analysts said in note.