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Financial Times: The heavyweight oil sector provided the backbone for yesterday’s advance

FT Headline: Leveraged buy-out talk makes Keldaone of top gainers

By Neil Hume and Robert Orr
Published: May 19 2007 03:00 | Last updated: May 19 2007 03:00

EXTRACT FROM ARTICLE

The heavyweight oil sector provided the backbone for yesterday’s advance.

Royal Dutch Shell added 2.5 per cent to £19.06, taking its gains over the past two sessions to 6.2 per cent,as rumours of a merger with BP, up 2 per cent to 582p, continued to circulate the market.

“A common argument against consolidation is that the previous mega-mergers happened in 1998-99 when oil prices were low. However, the game has changed,in our view,” said Man Securities. “Rising costs, resource nationalism and increased competition are changing the industry landscape.”

Elsewhere in the sector, BG rose 1.3 per cent to 780p amid suggestions of predatory interest from Exxon Mobil. Traders said oil stocks had also benefited from sector rotation.

Indeed, it was a powerful performance from second-line oil exploration stocks that helped the FTSE 250 end 59.2 points, or 0.5 per cent, higher at 12,202.8.

Copyright The Financial Times Limited 2007

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