Tullow Oil’s share price is rallying as investors cheer maintained bank lending limit
Tullow Oil's share price is leading the FTSE 250 today, as investors celebrated banks maintaining lending to the company.
In mid-morning trading the oil and gas producer's share price was up 14.03 per cent up at 227.8p.
This goes against the trend of oil producing companies of late, who have suffered due to global supply glut concerns.
Read more: Tullow Oil profit halves as price of oil stays low
As there is still considered to be market oversupply and lower demand, there has not been a fundamental market change to cause the rising share price, said Dominic Haywood at Energy Aspects.
Haywood said: "The rise is likely linked to the extension of credit Tullow received from the banks a month ago. Banks decided to maintain its lending at £3.7bn."
Read more: Tullow Oil may make writedowns
"With the market where it is you would expect larger financial constraints and stricter lending by banks. But keeping the lending limit at £3.7bn means Tullow can still operate".
It was also reported this morning that Ithaca Energy had become the first UK oil company to have its available credit cut following the devaluation of its assets by its banks.
Nomura, the investment bank, had set Tullow's rating to "reduce" this morning.