FTSE 100 opens flat on 5,846 points as oil prices continue to plunge with BP reporting £3.5bn net loss for first quarter due to global drop in demand
- FTSE 100 index of Britain’s biggest companies opens flat this morning at 5,846
- BP posts a £3.5bn net loss in first quarter as pandemic crushes demand for oil
- Oil prices fall on persistent concerns about oversupply and lack of storage space
- Governments around the world are announcing easing of lockdown restrictions
- Here’s how to help people impacted by Covid-19
London stock markets opened flat this morning as another decline in oil prices offset optimism about the easing of coronavirus lockdown restrictions.
The FTSE 100 index of Britain’s biggest companies opened today at 5,846, which is also the level it closed at yesterday.
It comes as BP said it slumped into a £3.5billion net loss in the first quarter as the pandemic crushed demand for oil.
Oil prices weakened again on persistent concerns about oversupply and a lack of storage space, with the benchmarks of US crude down 12 per cent to $11.22 (£9.01) a barrel and Brent crude falling 4 per cent to $19.20 (£15.45) per barrel.
From Italy to New Zealand, governments announced the easing of restrictions, with Spain letting children play outside for the first time since mid-March.
The FTSE 100 has been mostly rising over the past fortnight since April 16, but is flat today
However UK Prime Minister Boris Johnson said yesterday that it was too early to relax the lockdown in Britain, while New York state is not expected to reopen for weeks.
Some investors are hoping the worst may be over for the world economy as more countries allow businesses to re-open, but others see reasons to remain cautious, especially as a coronavirus vaccine has yet to be developed.
Commonwealth Bank of Australia said in a research note today: ‘We are less optimistic and expect a slower recovery in the world economy.
‘The risk of reintroducing restrictions is a risk to market participants’ optimistic outlook for a quick resumption of normal economic activity.’
All three major U.S. stock averages advanced on Monday and are all now within 20 per cent of their record closing highs reached in February.
A woman wearing a face mask walks past a board at the Hong Kong Stock Exchange today
BP posted a £3.5billion net loss in the first quarter as the pandemic crushed demand for oil
The benchmark S&P 500 is on track for its best month since 1987, after trillions of stimulus dollars helped US equities claw back much of the ground lost since the coronavirus crisis brought the economy to a grinding halt.
Most Asian shares gained small ground overnight, with China rising 0.65 per cent and South Korea up 0.4 per cent – but Japan’s markets hardly changed.
The US dollar and the euro were little changed as traders refrained from taking big positions before a US Federal Reserve policy decision due tomorrow and a European Central Bank meeting on Thursday.
Meanwhile London-based BP’s first quarter profits tumbled by two-thirds as the crisis hammered oil demand and its debt rose sharply amid uncertainty ahead.
BP said it expected significantly lower refining margins in the second quarter when global restrictions on movement reached their peak, throttling consumption of gasoline, diesel and jet fuel.
A spokesman said: ‘It is difficult to predict when current supply and demand imbalances will be resolved and what the ultimate impact of Covid-19 will be.’
It said oil and gas production faced ‘significant uncertainties’ linked to plunging oil prices and tumbling demand, as well as due to a deal between OPEC, Russia and other producers to cut global supplies of crude by about 10 per cent.
BP reported an underlying replacement cost profit, its definition of net income, of £643million, still beating the £571million forecast by analysts in a company-provided poll. The company reported a £1.9billion profit a year earlier.