High oil price a bonus for BAE

DEFENCE equipment contractor BAE Systems is collecting a windfall of nearly £1.5m a day from the rise in the oil price. It is paid in oil, not cash, by one of its biggest customers, Saudi Arabia.

City sources say the payment amounts to 400,000 barrels a day. This year's price rise from $30 a barrel to Wednesday's $37 (down $2) is worth an extra £1.5m a day.

BAE said: 'Yes, this a positive thing for us and it helps cash flow. But because of the volatility we don't tend to get overly exercised about it.'

The group has landed a subcontracting role to help build the US navy's new Littoral Combat Ship.

BAE employs 5,000 in Saudi Arabia, where it provides support and maintenance for the air force and the navy.

It says security is 'at a high level' following the weekend terror attacks.