Tullow Oil Bucks Sector Trend

The Dow Jones Industrial Average closed up 2.19 points at 10,405.98 on Tuesday, but a weak end to trading in the US ahead of non-farm payrolls data due on Friday, was reflected by London equities on Wednesday morning. Shortly before midday, the FTSE 100 was down 5.85 points or 0.1% to 5,478.21, retreating from a six-week high on Tuesday.

Dominic Turner
shareprices.com - Wednesday, March 03, 2010

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The US dollar weakened against the euro, down to €0.733 and the price of crude oil rose; benchmark crude for April delivery was up 41¢ to $80.09 a barrel. Energy stocks were generally weaker, however, with Cairn Energy (down 6.3p or 1.790% to 345.9p) under pressure after Morgan Stanley cut its target price to 330p. BG Group (down 13p or 1.1% to 1,165p), Royal Dutch Shell (down 19p or 1.06% to 1,766p) and BP (down 5.2p or 0.87% to 595p) were similarly out of favour, but rival Tullow Oil bucked the general trend rising 3p or 0.24% to 1,234p.

Morgan Stanley said that recent falls in Tullow's share price – from 1,230p to 1,164p at one point during February – presented investors with an excellent buying opportunity. Oil discoveries in Uganda and Ghana have allowed Tullow to more than double its market capitalisation in the space of a year and the company has been the subject of persistent rumours over a potential £15 per share takeover bid by BP. Both companies declined to comment, but BP Chief Executive Officer, Tony Hayward, played down acquisition talk, stating that BP was more interested in acquiring oil fields than companies.

 

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