Last checked at 
(Correcting that Brent hit its lowest price since November 2003.)
LONDON (Alliance News) - Volatility in oil prices after the West officially lifted sanctions on Iran over the weekend has driven stock movements Monday, as crude benchmarks hit their lowest levels since the end of 2003.
The FTSE 100 index had opened higher Monday, but traded down 0.1% at 5,798.43 points by midday. The FTSE 250 was down 1.0% at 16,009.39 and the AIM All-Share down 0.9% at 691.97. In Europe, the CAC 40 index was down 0.2% and the DAX 30 down 0.1%.
The New York market will be closed Monday for Martin Luther King's Birthday.
The FTSE 100's bounce was wiped out two hours into trade. Brent oil set its lowest price since November 2003 at USD27.69 a barrel before the equity market open, after the West dropped its economic sanctions against Iran, allowing the country to export oil freely and settling the dispute over the regional power's nuclear programme. The anticipation of more supply on the crude oil market put pressure on prices.
However, at midday in London, oil prices were staging a comeback, with Brent quoted at USD29.12 a barrel, not far off the USD29.39 a barrel price at which it was quoted at the London close last Friday. Similarly, US benchmark West Texas Intermediate was at USD29.49 a barrel midday Monday, up from its earlier low of USD28.35.
"You could read the Iranian news in two ways too: Either it promises more supply and more price weakness or it represents a 'sell the rumour, buy the fact' catalyst for a bounce," said Kit Juckes, strategist at Societe Generale.
"The oil market's only had two up days this year so far and this morning has seen another cyclical low (WTI under USD29, Brent has already traded below USD28). I'll stick with the above conclusion - we're due a short-term bounce but the tide hasn't turned yet," Juckes added.
The bounce was supporting London-listed oil majors, with BP trading up 1.9% and Royal Shell 'A' up 1.3%. BP also was upgraded by SocGen to Buy from Hold late Friday.
Shire was another top-performer in the FTSE 100, up 1.8% after Exane BNP upgraded the stock to Outperform from Neutral. The investment company said while Baxalta wasn't the best acquisition option for Shire, the deal is value-enhancing.
A week ago, Shire struck a USD32.0 billion cash-and-shares deal to acquire US-based Baxalta in a push to create a leading player in the rare diseases segment of the drug market.
Amec Foster Wheeler was the best mid-cap performer, up 4.2%. The engineering services group said Chief Executive Samir Brikho has stepped down and been replaced by its finance chief. Ian McHoul will become interim chief executive with immediate effect and hold the position until a permanent replacement for Brikho is appointed.
Amec said it will consider internal and external candidates for the role, but said McHoul has decided not to apply. Amec briefly added that its trading results for 2015 were in line with its expectations.
Empyrean Energy shares soared 47% higher after the oil and gas company struck a deal to sell all of its interest in the Sugarloaf AMI project in the US for up to USD71.5 million, potentially leading to some of the proceeds being returned to shareholders.
The company has entered into a conditional purchase and sale agreement with Carrier Energy Partners II, which will pay an initial USD61.5 million under the deal, paying the other USD10.0 million based on WTI prices in the future.
Fellow AIM-listed oil and gas company Petroceltic International was the worst performer in the AIM All-Share index, down 30%. The oil and gas company said it has secured an extension to its waiver of payments on its senior bank facility to January 29. Petroceltic added its lenders have indicated they are willing to consider other waivers in the future.
By Neil Thakrar; neilthakrar@alliancenews.com; @NeilThakrar1
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