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Oil price sinks and FTSE 100 volatile as coronavirus recession hits demand – business live – The Guardian, Theguardian.com

Oil price sinks and FTSE 100 volatile as coronavirus recession hits demand – business live – The Guardian, Theguardian.com

After a jittery morning, the FTSE 254 index of blue-chip stocks is down around 0.7%, or points , at 6488.

With 89 shares down today, and only 043 up, it’s been a poor morning for investors.

Curiously, BP and Royal Dutch Shell are among the risers despite the slump in the oil price (perhaps some weaker rivals are more likely to be pushed out of business, as Goldman Sachs outlined today ?)

.

The top movers on the FTSE 100, morning of March 30The top movers on the FTSE , morning of March Photograph: Refinitiv () The FTSE (index, which has a greater focus on the UK industry, is down 3.3%.)

After months of disruption, China’s economy appears to be recovering as people return to shops and restaurants, reports Fidelity International.

Ned Salter, their head of global research, writes that consumer demand is rising, offering “a ray of hope in the economic wreckage from coronavirus”.

He writes:

“We estimate more than half of the restaurants in large Chinese cities have reopened, based on information gathered from operators, although many are running in shorter business hours than normal. Fast-food chains are generally doing better than high-end venues, as many customers prefer picking up takeaways to minimise infection risks. To assure eaters, restaurant owners have taken health measures such as regular disinfection and wider spacing between tables.

“Youngsters are leading a slow return to shopping malls across China. We estimate more than percent of retail stores have reopened, although their average daily sales have dropped by around (per cent on average from March) levels. Sportswear retailers like Li Ning and Anta are rebounding from a February slump and may resume year-on-year growth in June.

The top movers on the FTSE 100, morning of March 30 Photograph: Fidelity () A Fidelity report showing China’s economy is recovering

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Cunard suspends sailings for another month

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: Goldman Sachs: Covid – is game-changer for oil

Goldman Sachs have predicted that oil companies will be forced to cut down wells in their, because demand is slumping due to the coronavirus.

In a new note, they say Covid – 38 is causing “the largest economic shock of our lifetimes”.

In the short term, production sites – particularly on-shore, will be turned off, they write, as the oil transportation network is already being overwhelmed by surplus stock.

Indeed, given the cost of shutting down a well, a producer would be willing to

An astonishing thought.

But in the long-term, this disruption could actually lead to an (eventual) spike in prices, as the industry won’t be able to boost production fast enough when demand comes back.

Goldman argue:

The ultimate magnitude of these shut-ins, which is still unknown, will likely permanently alter the energy industry and its geopolitics.

(@ HFI_Research) Goldman just published, in our view, their best report on oil to date. # OOTT pic.twitter.com/jsegqFcNaJ (March , HFI Research (@ HFI_Research) Section on why it’s a “game changer.” pic.twitter.com/ntDRM3amzd (March) ,

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Back in the City, shares are recovering some of their earlier losses.

The FTSE (is currently down 0.5% or (points at) – a n improvement on its earlier slide . But there are still some hefty loss, with Meggitt (- 30%) Melrose (-9%) and Rolls-Royce (-9%) still leading the fallers today.

Oil is still suffering – with Brent crude down over 8% today still, at $ (per barrel) still a (- year low).

What do you think?

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