Short selling pressure and worse…
Oil prices rose on Thursday…
After a run of poor earnings results the FTSE 100 share index dropped yesterday, ending the rally that had sent it to a four and a half year high.
Royal Dutch Shell led the group of large British companies that caused the easing in the share index, alone taking around 8 points off the UK blue chip index, following a poor fourth quarter performance which saw its profits fall short of expectations by about $400 million.
Despite the fact that Shell didn’t achieve its predicted profits for the fourth quarter, it still managed to earn $7.3 billion, a 12% increase from the year before.
Simon Henry, the chief financial officer at Shell, said that the “quarterly earnings are important, but they are only a snapshot of a much larger picture.”
Related article: Energy Markets: The Past is Not Always the Key to the Future
Shell will continue with its ambitious investment plans throughout the year, despite the lower than expected earnings at the end of 2012.
The FTSE is currently down 20.17 points, about 0.3%, at 6,302.62.
Vinay Sharma, a trader at Gekko Capital Markets, stated that, “because it's the last day of the month I would expect some pressure on the FTSE as we approach the close. It's down 20 points already, so we could possibly go another 20 points from here.”
The index has also been troubled by concerns about the US economy, which unexpectedly contracted during the fourth quarter, forcing the Federal Reserve to admit that the economy had stalled.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com