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LONDON MARKET PRE-OPEN: Ofgem Targets Shell Energy; Ascential On Track

Fri, 14th Jun 2019 07:34

(Alliance News) - Stocks in London are called for a marginally higher open on Friday, as the US and Iran play the blame game for the attacks on two tankers in the Middle East on Thursday.In a thin day for UK company news, Royal Dutch Shell's new retail energy business has been fined for overcharging customers, while Ascential is on track to meet annual expectations. IG futures indicate the FTSE 100 index is to open 5.3 points higher at 7,373.87. The blue chip index closed marginally higher at 7,368.57 Thursday.Brent oil was quoted at USD61.58 a barrel early Friday, slightly lower from USD61.80 late Thursday. Prior to the attack on the tankers, late Wednesday oil was quoted at USD60.85 a barrel, having fallen 2.4% in the 24 hours prior to that.US Central Command has released a video it says shows crew from an Iranian patrol boat removing an unexploded limpet mine from one of the tankers attacked on Thursday.Hours after the initial explosions the boat "was observed and recorded removing the unexploded limpet mine from the MT Kokuka Courageous", spokesman Bill Urban said in a statement alongside the video.Iran earlier "categorically" rejected the "unfounded claim" by US Secretary of State Mike Pompeo that it was responsible for the attacks, as concerns rise that a wider conflict in the region could be sparked by the incidents.In a statement, Tehran's mission to the UN accused the US and its regional allies of "warmongering".Iran's Supreme Leader, Ayatollah Ali Khamenei, also ruled out any future negotiations with the US on Thursday, during a meeting with Japanese Prime Minister Shinzo Abe."Iran does not trust the US," Khamenei said in Tehran. "We have already had the bitter experience with the Americans over the nuclear deal and do not want to repeat this experience."Meanwhile, the Japanese operator of the Kokuka Courageous tanker has said crew members saw "flying objects" before the explosion. Speaking at a news conference in Tokyo on Friday, Kokuka Sangyo President Yutaka Katada denied the tanker had been hit by a torpedo."Oil traders were kept hoping overnight as markets swung violently from one extreme to another as only hours after plumbing the depths, Brent prices soared after reports of torpedo attacks on two tankers carrying Japanese cargos in the Gulf of Oman," said Vanguard Markets' Stephen Innes."There are no coincidences when it comes to terrorism, and in retrospect given Japan is the US's biggest ally in Asia, it's not difficult to connect the dots especially with Prime Minister Abe wrapping up a high stakes negotiation with Iran trying to broker a deal between Tehran and Washington."This blatant act of terrorism was a not so subtle reminder of the enormous supply tail risks in and around the Strait of Hormuz as the strategic oil supply choke point remains a prime terrorist focal point to disrupt the flow of seaborne oil exports from the Middle East," continued Innes."Despite US Secretary of State Mike Pompeo laying a browbeat on Iran, a military escalation is unlikely and given the market's tendency to quickly sidestep lone wolf or small group terrorist attacks, oil prices have come off the boil as traders pivot back to the task at hand."In a quiet day for UK corporate news, Shell's retail energy arm Shell Energy is to refund customers and pay GBP200,000 to the UK regulator after overcharging on its default tariff.The total amount paid by Shell, Ofgem said, will be GBP390,000. The oil giant has been found to have overcharged around 12,000 customer accounts between January and March. In the FTSE 250, business-to-business media firm Ascential confirmed it is trading in line with expectations for 2019. The Product Design business is set for 9% organic revenue growth in the six months to June, with subscriptions growth boosted by "excellent" progress by the Mindset advisory product.Ascential has guided for the Marketing unit to deliver 12% organic interim revenue growth, while the Sales business is set for 3% organic revenue growth. Events in both segments are doing well, Ascential said, while Built Environment & Policy is also meeting expectations. Investor HgCapital Trust has raised GBP63.7 million, after issuing 29.4 million new shares at a price of 217.1 pence each. Shares closed flat Thursday at 216p. The placing was announced Monday, with HgCapital originally saying it was to raise GBP80 million. Amigo Holdings has confirmed Chief Executive Glen Crawford has departed as an executive director with immediate effect, though he will remain as an advisor to CEO-designate Hamish Paton.In April Amigo, which lends to people with poor credit ratings, said Crawford was to step down in the summer for medical reasons.Elsewhere, UK life insurance consolidator ReAssure Group has confirmed it plans to list in London during July, targeting the FTSE indices.ReAssure's initial public offering will solely consist of insurance giant Swiss Re selling its shares in the company. Swiss Re originally announced a possible IPO for ReAssure in August 2018, with its stake set to fall to below 50% from 75% currently.The pound was quoted at USD1.2678 early Friday, marginally down from USD1.2683 late Thursday, after frontrunner Boris Johnson eased to victory in the first round of voting for a new Conservative leader, and UK prime minister."If Johnson gets into power it looks like an inevitable showdown over whether a no-deal Brexit can be forced through or whether another general election is required. For some, this vote is equally about who will be able to hold on to power later in the year if a general election is forced," said IG's Joshua Mahony."While Thursday's vote highlights an almost unassailable lead for Boris heading into next week, the crucial thing to remember is the ultimate decision comes from Tory members rather than MPs."Eurozone finance ministers have made progress on establishing a budget tool for the 19-member currency bloc during a marathon meeting in Luxembourg, dpa reported early Friday.However several important issues remained unresolved, including how the budget would be financed.French Finance Minister Bruno Le Maire called the results of the meeting a "breakthrough."In the US on Thursday, Wall Street ended in the green, with the Dow Jones Industrial Average closing up 0.4%, the S&P 500 also up 0.4%, and the Nasdaq Composite 0.6% higher.The Japanese Nikkei 225 index closed up 0.4% on Friday. In China, the Shanghai Composite is down 0.7%, while the Hang Seng index in Hong Kong is off 0.6%.The economic calendar Friday has Italy's inflation readings at 1000 BST and US retail sales at 1330 BST.In addition, Bank of England Governor Mark Carney speaks at the Women in Banking & Finance 22nd Anniversary Awards for Achievement lunch at 1355 BST.

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Brent oil spikes higher after Trump says Russia and Saudi will cut output

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FTSE 100 movers: Shell and BP pace gains as Brent surges 24%

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