Monday lunchtime business bulletin

Jun 23 2008 By Andrew Mernin

Oil prices rose today as investors shrugged off Saudi Arabia’s pledge to increase production if needed.

The cost of light, sweet crude increased by more than one US dollar to 136.71 dollars a barrel in early trading on New York commodity markets.

The price went up despite a commitment by the world’s biggest oil producer at a specially-convened meeting in Jeddah, Saudi Arabia, yesterday to up production levels ``if they are needed".

The Saudi government has been under intense pressure from the US and other oil consumers to increase its crude output to help slow the soaring price of oil.

Halifax Bank of Scotland led a poor session for financial stocks today as shares returned below the company’s rights issue price of 275p a share.

Lloyds TSB was another faller amid concerns among investors about the bank’s reported interest in a possible £6 billion takeover in Germany.

Energy stocks meant the FTSE 100 Index held on to positive territory, with the impact of higher oil prices leaving the top flight 19.7 points stronger at 5640.5 by mid-morning.

The London market is now even more weighted towards the commodity sector after mining firm Ferrexpo and oil and gas services firm Petrofac replaced Persimmon and Alliance & Leicester in the top flight’s latest reshuffle.

Shares in struggling furniture retailer ScS Upholstery were suspended by the company today as it thrashed out a rescue deal.

Sunderland-based ScS, which has been trying to secure new working capital after a sales slump driven by the consumer spending slowdown, said it has received an approach for the entire share capital of its sole trading subsidiary.

The deal would result in ``negligible value" for the shares of parent ScS Upholstery, the firm said.

``As a result, the directors of ScS have requested a suspension in the trading of the company’s shares with immediate effect," it added.

The pound at noon was US$1.9626 compared to US$1.9733 at the previous close while the euro at noon was £0.7911  compared to £0.7921 at the previous close.