The FTSE 100 was under pressure on Tuesday amid a gloomy global market outlook.
The hopes earlier in the summer that inflation might have peaked, and the Federal Reserve might, in turn, ride to the market’s rescue, are looking increasingly forlorn.
European natural gas prices saw a renewed surge after unscheduled ‘maintenance’ works by Russian state energy operator, Gazprom, on the pipeline which links Russia and Germany.
“It seems likely this is an attempt by the Kremlin to remind Europe of its leverage as the war in Ukraine continues to rage and sanctions against Russia continue to bite,” says AJ Bell investment director Russ Mould.
“Warnings of a ‘catastrophic’ winter energy crisis in the UK from EDF will do little to lift a dark consumer mood on these shores.
In theory Wood Group, with its energy services focus, should be a beneficiary of buoyant prices, but that doesn’t appear to be the case with revenue and profit dipping in its first-half period.
“The company’s pivot away from large projects is partly to blame and investment in the energy sector is yet to really pick up despite the significant cash windfall many companies have been enjoying.
“Often there is a lag between a recovery in the oil and gas market and any increase in industry spend. The danger for Wood is that a weaker economic outlook puts businesses off sanctioning major developments.
Meanwhile BT shares crept up following relief that the UK Government won’t make major shareholder, French billionaire Patrick Drahi, sell any of his 18% stake after a review on the grounds of national security.
“However, the whole affair is a reminder of the sensitivities around critical national infrastructure and the implications this could have for BT’s future strategy.”