London stocks opened lower on Thursday as falling oil prices weighed on the energy sector, offsetting broader optimism across UK equities.
The FTSE 100 slipped 0.3% to 10,428.43 in early trading, with heavyweight oil producers leading the declines. Shell fell 0.5% while BP dropped 1% as Brent crude extended its recent retreat amid hopes that renewed diplomatic talks between the United States and Iran could ease geopolitical tensions and improve global oil supplies.
In contrast, the more domestically focused FTSE 250 edged 0.1% higher to 23,130.36, supported by improving investor sentiment and continued strength in UK-focused businesses.
The divergence between the two indices reflects the FTSE 100’s heavy exposure to global commodity producers, while the FTSE 250 has benefited from easing concerns over energy prices and a more constructive outlook for the UK economy.
Oil prices fell sharply on Thursday as growing expectations of a global supply surplus pushed crude below levels seen before the Iran conflict began.
Brent crude dropped to as low as $72.24 a barrel, slipping below its price on the eve of the Iran war. The decline reflects increasing confidence that a lasting peace agreement between the United States and Iran could restore normal oil flows from the Gulf.
Market sentiment has improved as diplomatic negotiations continue, encouraging more oil tankers to transit the Strait of Hormuz and easing concerns over supply disruptions. Investors are now shifting their focus from geopolitical risk to the possibility of increased global production, raising fears that oil markets could move into oversupply in the coming months.
The fall in crude prices has weighed on energy stocks, with major producers such as Shell and BP coming under pressure as investors reassess the outlook for oil markets.
