Oil price surge hits world markets

World markets have endured another difficult session after the price of Brent crude oil surged to a fresh two-and-a-half year high.

The impact on supplies due to the ongoing crisis in Libya and fears the unrest may spread to other oil producing nations meant Brent jumped to more than 119 US dollars (£74) a barrel before settling at 116 US dollars (£72) a barrel.

The potential impact of high oil prices on economic growth meant the FTSE 100 Index continued its poor week, falling by as much as 60 points early on and later standing 30.5 points lower at 5893.3.

In a busy session for corporate results, part-nationalised Royal Bank of Scotland fell 2% or 1.15p to 46.2p as losses of £1.1 billion came in higher than market expectations, offsetting comments from chief executive Stephen Hester that the bank’s five-year turnaround plan remained on track.

Centrica was also under pressure, falling 7.99p to 327.15p, as it reported a 29% jump in profits to £2.4 billion, a performance that included a record surplus of £742 million from its British Gas residential arm.

Analysts said the results did little to ease fears that Ofgem could refer the energy sector to the Competition Commission for further investigation.

Support services firm Capita topped the risers board, lifting 36.75p to 706.75p, after a 12% rise in underlying profits and a record bid pipeline of £4.7 billion.