Nearly £11 billion was wiped off the value of Britain’s largest oil companies following reports that Saudi Arabia may abandon its unofficial oil price target.
BP and Shell fell to the bottom of the FTSE 100 as Brent crude prices dropped. The two companies were the biggest losers on Britain’s flagship stock market, with BP down 4.8% and Shell down 4.7%, resulting in a combined loss of approximately £10.9 billion in their valuations.
Overall, more than £11 billion has been lost from the market value of oil and gas sector companies across the FTSE 100 and FTSE 250 today.
OPEC+ is set to proceed with an increase in oil production.
According to reports, OPEC+ will proceed with its plans to increase oil production starting in December.
The Organisation of the Petroleum Exporting Countries, along with allies like Russia, is set to boost output by 180,000 barrels per day in the final month of the year. While the cartel initially planned to increase production in October, it announced a delay last month.
Now, the decision will move forward, as Iraq and Kazakhstan have committed to additional cuts totaling 123,000 barrels per day in September, along with further reductions in upcoming months, to offset previous production levels that exceeded agreed limits, as reported by Reuters.
This development comes as Saudi Arabia is said to be ready to abandon its $100 per barrel price target for oil, contributing to a 3.3% decline in the price of Brent crude today, bringing it down to around $71.
This decline in oil and gas stocks prevented the UK from benefiting from a global stock market rally spurred by the promise of new economic stimulus in China. The FTSE 100 rose by 0.2%, lagging behind gains of 1.6% on the CAC 40 in Paris, 1.2% on the DAX in Frankfurt, and 4.2% on both the Hang Seng in Hong Kong and the CSI 3000 in Shanghai.
