It is a crude equation: with the oil price staying at well above $30 a barrel, the oil companies will be making telephone-number profits. Forget what you read about boardroom fallout and reserve accounting issues at Shell, at the moment oil really is black gold.

BP will make this point today when it announces its first-quarter results. During the first three months of the year, Brent oil averaged $32.03 a barrel. That is the highest quarterly average for more than a decade. Not surprisingly, the numbers will be stunning, and analysts will be keen to hear more about BP's plans to return billions of pounds of surplus cash to shareholders.

The first quarter profits equate to the value of one of the smaller companies in the FTSE 100. To put this into context, BP could afford to buy the Bradford and Bingley with one quarter's profit. While this is a big profit, it has to be remembered just how huge BP, as Britain's biggest company, actually is. The market capitalisation, including all the original Sid-type shareholders, is approaching £108bn.

Shell, currently knee-deep in the brown stuff, will attempt to refocus the market to its black stuff when it reports on Thursday. Again, despite its controversial recent problems, the figures are expected to be huge.

The first of the May bank holidays is fast approaching, and tradition dictates that every man must char some meat over the barbecue. If the rust from the old barbecue cannot be removed, expect to see a bumper weekend for the DIY stores selling new ones. Homebase, formerly owned by Sainsbury's, is expected to benefit, and bolster the share price of its current owner, Gus. The more sophisticated burger burners use gas barbecues, as the latest hot trend.

Expect the ever-capable supermarket groups again to cash in. Fresh from giving WH Smith a lambasting last week, the shelves will be crammed with multi-flavoured sausages waiting to be cremated. The shrewd operators are also selling special burger trays to allow the burning of four burgers at once.

From one vice to another. Tomorrow, Imperial Tobacco, the UK's second largest producer of cigarettes, will be coughing up its half-year numbers and expect its earnings to be at least 15 per cent ahead. Poor old WH Smith must be thinking how nice to have such loyal and devoted customers.

Housebuilder Persimmon, based in York, announced record profits last week for 2003, and went on to add that 2004 should be even better. Demand remains very strong, and prices are expected to keep on climbing. It is difficult to see the cry from the South of England that a property crash is imminent becoming reality in the North, aiding the existing equity-based feel-good factor.

While many believe that interest rates must increase to halt mortgage lending and consumer credit, there is currently no pressure on UK inflation, and an increase in interest rates after the barbecue weekend, is by no means certain. The Bank of England's monetary policy committee meets next week. Until then, there is little reason why the stock market should not push on to further 21-month highs.

For investment advice contact Anthony Platts on 01642 608855.

Published: 27/04/2004