London shares have come off their best levels after Wall Street slipped into reverse on renewed credit crunch worries.
Following a positive start after reasonable results from Hewlett-Packard, the US market is now down nearly 40 points. Troubled US mortgage groups Fannie Mae and Freddie Mac have seen their shares tumble once more on fears they will need a US government bail-out. There are reports that one of them, Freddie Mac, plans to meet the US Treasury today to clarify the situation.
This has taken the shine off the FTSE 100, which is now up just 16.6 points at 5337.0.
News of problems at a Norwegian gas field was seen as another positive for Tullow Oil, whose shares have already been lifted by a buy note from UBS and takeover speculation.
Phil Corbett, an analyst at Royal Bank of Scotland, said: "UK gas prices have posted significant gains today on news that a pipeline from the Kvitebjoern gas field in Norway (which we estimate comprises 5% of 2008 forecast Norwegian gas output) was shut down after a leak was discovered. Statoil, the operator, has declined to give a timetable for fixing the pipeline. Winter 2008 gas jumped 11% and spot UK prices rose by a similar level.
"This is bullish for Dana Petroleum, Tullow and Venture Production, and highlights the jittery nature of the markets to any sign of indigenous supply disruptions."
Tullow is ahead 49p at 743p, Dana has climbed 87p to £13.80, while Venture is 17.5p better at 762p.
