Hopes for oil keep the wheels turning

OIL STOCKS drummed up support after the crude price recorded its biggest jump of the year. It touched $21.43 a barrel in New York overnight then held at $21.10 in London on hopes of significant production cuts at today's Opec meeting in Cairo.

Dealers are confident that Opec will announce a cut of 1.5m barrels a day. Producers outside the Opec group have already agreed to cut just over 460,000 barrels a day with Russia trimming by 150,000 barrels. The reductions should come into force on Tuesday and will last for six months.

Opec recently said it wanted to lower production to bolster prices, which have plunged since the terrorist attacks.

More than 14m BP were traded and the close was 2 1/2p dearer at 533p, while Shell firmed 1 3/4p to 477 1/4p on turnover of almost 15m. Enterprise, however, succumbed to profit-taking and lost 11 1/2p at 448p.

Edinburgh Oil & Gas, one of this year's star performers, gushed 7p further to 112 1/2p. There has been no holding it back since it announced the biggest North Sea oil find for over 10 years. The Buzzard field is expected to increase the company's proven reserves more than threefold from 3.3m barrels.

BG Group rose 6p to 279p on hearing that Israeli energy firm Isramco had confirmed that a site containing millions of cubic metres of natural gas had been found on the northern coast of the country. BG has a 25% stake in the consortium that owns the location. Centrica gained 9 1/2p to 224 1/2p.

Oils kept the market ticking over, but proceedings elsewhere were slow, to say the least. Many traders extended their holiday, preferring to eat the rest of the turkey and mince pies rather than wait for the phone to ring in half-empty dealing rooms.

Some end-year window dressing and final squaring of dealers' books, plus an opening gain of 59 points on Wall Street, helped the Footsie close 35.8 higher at 5213.2. Turnover was 497m, up on Christmas Eve's half-day total of 264m. The pound rose over a cent to $1.4535, while the euro slipped to 60.85p.

The Royal Institute of Chartered Surveyors' prediction of a 6% rise in house prices in 2002, compared with 10% this year, left housebuilders easier in places. Giant mortgage lender Halifax forecasts price growth will slow to just 5%. Persimmon lost 9p to 373p, Fairbriar 5p to 58 1/2p and John Laing 3 1/2p to 151 1/2p.

Barratt shrugged off the downbeat forecasts, rising 11p to 417p as did George Wimpey, 7 3/4p better at 219p.

Reports of a £13bn post-Christmas sales bonanza failed to excite retailers. Fund managers preferred to keep their powder dry until companies give their seasonal trading updates next month. Trendy fashion group Next, (update on January 8) eased 5p to 885p. JJB Sports (January 13) firmed 1 1/2p to 450p. Supermarket J Sainsbury added 11 1/2p at 371 1/2p and Safeway 3 3/4p to 314 3/4p.

Still awaiting bid terms from its 20% Icelandic shareholder Baugur, Top-Shop-to-Dorothy-Perkins group Arcadia dropped 11p to 255p on profit-taking.

Banks were in demand following a bumper cash-withdrawal festive shopping season. Barclays rose 11p to 2251p and Royal Bank of Scotland 19p to 1684p. Very vague rumours of a possible New Year merger lifted mortgage bank Alliance & Leicester 12p to 790p and Northern Rock 21 1/2p to 637 1/2p.

Hoping that membership levels surge as Joe Public attempts to work off the excesses of Christmas and build 'quality muscle', health club group Fitness First jogged 22 1/2p higher to 462 1/2p.

London Pacific, the investment and financial services group, jumped 55p to 270p on speculative buying.

Sold down to 14 1/2p on news of a much bigger interim loss of £12.99m, Manston airport owner and property developer Wiggins Group closed 1p off at 15 1/2p.

It is pinning its hopes for a return to profitability on its PlaneStation concept - a network of regional airports across Europe.