Daily Business Live: Oil price rises; US jobs; Wood; Centrica
5pm: Oil price rises
The price of Brent crude surged 23% to $30.76 a barrel after US president Donald Trump tweeted that he expected Saudi Arabia and Russia, which have been locked in a bitter price war, to announce huge production cuts.
The FTSE 100 had been in positive territory until US figures showing 6.65m claims for unemployment in the US in just one week. The index fell on the news, but staged a late rally on hopes of an end to the oil price war to close at 5,480.22 +25.65 (0.47%).
4pm: Edinburgh Fringe
Some of the venues yesterday said they may still be able to stage shows, now the Fringe Society says it is capable of putting the event on if the virus crisis eases.
2.10pm: US job figures
The number of Americans filing new claims for unemployment benefit has surged to 6.65m, as the coronavirus pandemic continues to tear into the economy.
The actual figure is believed to be even higher as many people have reported jammed phone lines and difficulties with filing their claims online.
Stock markets fell into losses on the news. The FTSE 100 fell to 5,439, down 15 points on the day and off a high of 5,510 reached earlier in the session. US markets opened lower, with the S&P 500 down 0.2%.
1.30pm: Poll on government action
A poll by Ipsos Mori conducted between 27 and 30 March shows 56% of respondents saying the restrictive measures put in place by the UK government on 23 March were taken too late. Only 35% of people said they were taken at the right time, with 4% saying they were taken too early.
This shows a deterioration in approval of government action. A Deltapoll survey conducted on 26-27 March found that 75% thought the government was doing the right thing.
However, Government enforcement has been effective with 79% of people now saying they are avoiding leaving their homes, up from only 50% before the Government’s lockdown.
Noon: National Express stops buses
National Express will fully suspend its national network of scheduled coach services with effect from midnight Sunday 5 April.
Chris Hardy, managing director of National Express UK Coach: “We kept a limited coach network running to be able to help those individuals with essential travel needs but it is no longer viable to continue to do this.
“Passenger numbers continue to fall as the public rightly follow government advice to avoid non-essential travel. The decision to temporarily suspend all services is the right one based on the current unprecedented circumstances and I hope our passengers understand this.”
11am: Oil price boost
The price of Brent crude surged 8.8% to $26.91 a barrel after US president Donald Trump said that after talking with Russia and Saudi Arabia’s leaders, he believed a deal could be struck between the two within a “few days.”
8am: Credit card freeze
Banks have been asked to impose a temporary payment freeze on loans and credit cards where consumers face difficulties with their finances as a result of coronavirus.
7.10am: Wood expects order hit
The energy services company expects some of the existing order book will be subject to postponement and that new order intake will slow due to the impact of COVID 19 and lower oil prices.
The board, executive directors and senior leaders are taking a voluntary, temporary 10% reduction in base salary. An additional group of employees is also being asked to do the same. In total, it anticipates this will generate overhead savings in 2020 of c$40m.
“Regrettably, employee reductions are also being made in certain areas reflecting the reduction in operational activity.”
The company has announced capital expenditure reductions of $20m to $25m and has withdrawn the proposed final dividend of 23.9 cents per share (total cost $160m).
The Annual General Meeting due to be held on 7 May is postponed.
Robin Watson, CEO (pictured), said: “Like many companies, Wood is being affected by the unprecedented event of Covid-19 and its impact on the global economy – an event compounded by the sharpest decline in oil price in 20 years.
“Our strategy has led to a substantial broadening of our business across energy and built environment markets, reducing our reliance on any one industry or sector. Our proven track record of leveraging our flexible, asset light model in response to changing market conditions stands us in good stead.”
7.05am: Saga outlook
Given the significant potential impact of COVID-19 on the travel industry, the Group has considered scenarios for extended suspension of Cruise and Tour Operations, including full cancellation of all travel departures over six months, followed by a slow recovery.
The dividend has been suspended.
“The outlook is uncertain, but we remain confident that the Saga brand, and our Insurance and Travel businesses have a successful future ahead.”
7am: Centrica delays capex
British and Scottish Gas owner Centrica is reducing its 2020 cash expenditure by around £400m compared to previous plans, including reductions in non-essential operating costs and the delay of capital and restructuring projects, to provide flexibility to navigate the impacts of the coronavirus pandemic.
It has extended the decision not to pay any board level bonuses to all other management.
The proposed 2019 final dividend payment of 3.5 pence per share has been cancelled
The Spirit Energy divestment process has been paused until financial and commodity markets have settled.
Service engineers will continue to attend breakdowns.
“Although we are starting to see increased energy demand from residential customers as more people work from home, we are seeing a more significant reduction in demand from business customers as sites temporarily close.
“We also expect to see an increase in working capital outflows and customer bad debt, as certain customer segments defer payments due to the reduction of household incomes and business revenues.
“In addition, we are likely to see an impact on revenues from our services and solutions activities for both homes and businesses, as we prioritise only essential work in the near term and given the uncertain economic outlook.”
The AGM on 11 May will be a closed event.