Yahoo Finance Mining stocks rally as oil demand set to rise and UK economy strengthens
Mining stocks steamed ahead on Friday, helping the FTSE 100 (^FTSE) to push to its highest level in a month.
Glencore (GLEN.L) rose more than 3%, Antofagasta (ANTO.L) climbed 2.5% higher and Evraz (EVR.L) was up 2.7% in noon trade, lifting London’s benchmark index to its highest since 10 May, when it touched a new record level since the pandemic began.
Newly-listed Thungela Resources (TGA.L), a spin-off from Anglo American (AAL.L) also pushed 2.4% higher on the day, while healthcare stocks also joined the precious metal and base metal miners on the rally.
It came as metal prices and oil prices rose on Friday as the International Energy Agency (IEA) said on Friday oil demand is set to rise above pre-COVID levels by the end of 2022, but that oil producers will need to boost production.
The Paris-based body expects consumption to rebound by 5.4 million barrels per day (bd) this year as vaccines are rolled out and economies reopen. Consumption declined by a record 8.6 million bd in 2020 as the coronavirus pandemic took a hold.
It expects a further 3.1 million bd increase in 2022, to average 99.5 million bd with an increase at the end of the year that will surpass the level of demand before the COVID pandemic.
Countries outside the Organisation of Petroleum Exporting Countries and its allies (OPEC+) group are expected to boost output by 1.6 million bd next year, to exceed 2019 levels.
While, OPEC+ countries will have 6.9 million bd of spare capacity even after lifting production by 2 million bd over the May-July period.
Read more: Oil demand will exceed pre-COVID levels by end of 2022
London miners were also boosted by reports that the UK economy grew 2.3% in April, the fastest rise since July 2020.
The figure, which follows strong growth of 2.1% in March, was slightly above Reuters poll consensus for a 2.2% increase as non-essential shops and outdoor hospitality reopened to the public after months of lockdown.
The services sector provided the biggest boost to the British economy, with output growing 3.4% during the month.
However overall output remains 3.7% below the pre-pandemic levels seen in February last year. Output in the production sector fell by 1.3% in April 2021, the first fall since January 2021 as three of the four sectors contracted.
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