Tullow Oil has brightened up the market after the Bank Holiday break, with its shares up more than 20% so far.
With the crude price at record highs, it is a good time to announce a positive update on an oil discovery. So news that Tullow's Mahogany 2 well off Ghana has found a significant amount of light oil - indicating that its Jubilee field may be bigger than expected - has been well received. At the moment Tullow is 167p higher at 927p.
House broker ABN Amro raised its price target from 700p to 835p, saying: "We maintain our buy recommendation, and we expect the prospect of incremental drilling news flow from Ghana and Uganda to maintain positive sentiment in the near term."
Other commodity companies have also moved higher, with Cairn Energy up nearly 3% and mining groups Rio Tinto and BHP Billiton both 2% better awaiting bid news. The buoyant gold price lifted first quarter profits at Randgold Resources, and its shares have climbed 144p to £24.19.
But financials are dragging the index down, despite an upbeat statement from Lloyds TSB, which indicated it did not need to follow Royal Bank of Scotland and HBOS with a rights issue. Collins Stewart issued a buy note on the bank but added: "Looking out longer term, a UK recession is likely to materially impact Lloyds TSB but we feel it too early to downgrade."
Sentiment in the sector has not been helped by losses and job cuts at Swiss bank UBS.
Among the other fallers British Airways is down nearly 4% after a note from JP Morgan saying the airline may not restart its dividend this month, given the rise in the oil price.
But market research firm Taylor Nelson Sofres jumped 25p to 240p. It has rejected a bid from advertising group WPP but analysts believe the latter may come back with a higher cash offer. TNS has just announced plans for a merger with German rival GfK.
