Market report

Oil price slides on US release | UK GDP growth accelerates


10pm: Biden opens oil taps

petrol pump

US President Joe Biden is ordering the release of one million barrels of oil per day from the nation’s strategic petroleum reserve for six months, the White House said.

The move is designed to control energy prices that have spiked after the United States and allies imposed steep sanctions on Russia over its invasion of Ukraine.

The White House said Mr Biden wants Congress to impose financial penalties on oil and gas companies that lease public lands but are not producing.

Markets reacted quickly with crude oil prices dropping about 4% in Thursday trading to under $104 a barrel.

The Dow Jones Industrial Average lost 1.56%, the S&P 500 was down 1.57%, while the Nasdaq Composite was 1.54% lower.

Investors will look toward Friday’s jobs report for more confirmation of labour market strength and insight into the possible path of monetary policy by the US central bank.

4.30pm: Tough first quarter closes

Brewin Dolphin rocketed 194p (61.01%) to 511.5p after the wealth manager agreed to be acquired by Royal Bank of Canada in a £1.6bn deal.

Rathbone Group also racked up healthy gains, closing 12.24% firmer.

Trainline jumped 26.14% after it agreed to reduce the commission it receives for selling train tickets as part of a review by the rail industry.

Pearson was ahead 1.54%, having tumbled on Wednesday after US investment firm Apollo said it would not make a takeover offer for the educational publisher.

The FTSE 100 closed 63.07 points lower at 7,515.68 as the oil price fell the expected release of a million barrels a day in the US.

Danni Hewson, AJ Bell financial analyst, said: “The first quarter of 2022 has been a rough one for investors to navigate. Volatility has been the name of the game as levers were pulled to curb rising prices, and war undermined many of those efforts.

“Of the ten main global indices only London’s blue-chip FTSE 100 has emerged from the last three months in better shape than it went in, boosted by miners and energy giants cashing in on runaway commodity prices.

“Today Opec+ decided against the change in direction that might have helped bring the price of a barrel of Brent Crude back under $100 a barrel, several members steadfastly refusing to engage in global politics instead insisting balancing oil markets must take precedence.

“Sanctions against Russia have distorted supply and though Washington’s move to release stored oil has cooled markets it’s only a stop gap. In London and on Wall Street the energy sector was subdued on this last day of March trading, pulling markets towards a negative close.”

7.30am: UK GDP

The UK economy grew at a faster pace than initially estimated in the fourth quarter of last year and is now back to pre-pandemic levels, according to the Office for National Statistics.

GDP rose by 1.3% on the previous quarter, up from an initial estimate of 1% growth and from revised 0.9% growth in the third quarter. The economy is now just 0.1% below where it was before the pandemic.

Annual GDP growth is now estimated to have increased by 7.4% in 2021, revised from the previous 7.5% estimate, and a revised 9.3% decline in 2020, against 9.4% previously.

7am: Brewin Dolphin acquired

RBC Wealth Management, a subsidiary of Royal Bank of Canada, is buying UK wealth manager Brewin Dolphin in a £1.6bn agreed deal.

Full story here

7am: Candidate.ID acquired

Candidate.ID, the the Scottish recruitment technology specialist, has been acquired by New Jersey company iCIMS.

Full story here

7am: Ithaca Energy buys North Sea assets

Ithaca Energy acquired North Sea assets from Summit Exploration and Production for $224m.

Ithaca is buying small stakes in the Elgin-Franklin hub as well as the Seal and Gael pipelines, with several other offshore exploration licences also changing hands.

Full story here

US oil release

Oil prices dropped overnight on reports the US is set for the largest release from its strategic reserve since its creation in 1974.

US President Joe Biden is poised to authorise the release of up to 180 million barrels of oil, according to the reports this morning. If confirmed, this will be the largest-ever release since the reserve was created in 1974.

Mr Biden is due to speak at 13:30 local time (17:30 GMT) on his administration’s actions to reduce the impact of Russian President Vladimir Putin’s price hike on energy prices. 

Brent crude futures were down 4.9% at $107.89 a barrel and US crude futures fell more than 5% to $101.37 a barrel by midday.

Global markets

Wall Street snapped a four-session winning streaks on waning signs of progress in peace talks between Ukraine and Russia.

The Dow Jones Industrial Average fell 0.19%, the S&P 500 lost 0.63%, and the Nasdaq Composite dropped or 1.21%.

China’s official manufacturing PMI fell to 49.5 in March from 50.2 a month ago, indicating an economy in decline with services also contracting.

Asian equities drifted lower. The Nikkei 225 in Tokyo was down 0.5% in late trade. In China, the Shanghai Composite was 0.4% lower and the Hang Seng in Hong Kong was down 1.1%.

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