MARKET REPORT: Lukewarm response to windfall tax change
Oil stocks climbed as investors cautiously welcomed plans to soften the windfall tax.
In a bid to boost production in the North Sea, the Treasury said it will reduce the tax rate on profits from 75 per cent to its previous level of 40 per cent if oil and gas prices normalise for at least six months.
The energy profits levy was introduced in May last year as the industry cashed in on soaring energy prices following Russia's invasion of Ukraine.
The tax rate will be axed so long as oil and gas prices fall to, or below, $71.40 a barrel and 54p per therm for two consecutive quarters. Prices last reached these levels in 2021, with oil currently $76 a barrel while gas is around 63p a therm. That is a far cry from when Brent crude peaked at $130 a barrel last year and gas soared as high as 6 a therm.
Harbour Energy gained 2 per cent, or 4.9p, to 251p, Enquest added 4.1 per cent, or 0.63p, to 16.14p, Serica Energy was up 3.4 per cent, or 8.2p, to 250p and Ithaca Energy rose 4.9 per cent, or 7.2p, to 153.2p. Major oil explorers, which rely far less on the North Sea for business, were little moved with BP down 0.8 per cent, or 3.75p, to 471.6p while Shell slid 0.6 per cent, or 14.5p, to 2294.5p.