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London’s blue-chip index is set to reverse some of its losses earlier in the week as investors weigh up the rising price of oil.

Brent crude – the international benchmark for oil prices – surged above $110 per barrel on Wednesday, resuming its advance following mixed reports on diplomatic progress between the US and Iran.

Prices fell sharply on Tuesday after Pakistan’s army chief, Field Marshal Asim Munir, met with senior Iranian diplomatic and military officials in Tehran to discuss the next step for talks with Washington.

But a diplomat involved with the discussions has dismissed reports that a deal was imminent, while confirming that efforts to end the conflict remain underway. Oil prices have gained more than 10 per cent this month.

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