FTSE 100 to make modest progress, buoyed by oil price rally

BP's results will be in focus, with investors likely to home in on any commentary about the dividend

Brent crude was trading around 0.2% higher this morning

UK shares look set to open modestly higher, helped by a slight recovery in oil prices.

Brent crude for June delivery was trading 12 cents (0.25%) higher at US$42.76, buoyed by the weakness of the dollar ahead of this week's meeting of the Federal Reserve's policy makers.

There was also talk overnight that oil stockpiles in the US continue to grow while output from Kuwait, Libya and Saudi Arabia is being cranked up.

Spread betting quotes point to the FTSE 100 index opening a dozen or so points up from last night's close of 6,261, despite a weak showing by Asian markets this morning.

Approaching the close of trading, the Nikkei 225 in Japan was off 80 points at 17,359 while in Hong Kong the Hang Seng index was 126 points in the hole at 21,178.

US markets were also off the pace last night, with the S&P 500 shedding four points to close at 2,088.

The Dow Jones industrial average finished 27 points lower at 17,977 and the Nasdaq Composite shed 10 points to close at 4,896.

In the UK, the big event is the release of first quarter results from BP PLC.

While taking a battering from shareholders over the company's policies on executive remuneration the chairman dropped a hint that the oil giant's dividend could not be maintained forever at its current level in an environment where oil prices continue to decline, so any commentary on the dividend policy will be seized on, particularly by those pension funds that rely on BP to provide a chunk of their income.

Other big names reporting include British American Tobacco PLC (LON:BATS) and Standard Chartered PLC (LON:STAN).


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