Oil prices surge after Trump claims Russia and Saudi Arabia agree deal - as it happened

Donald Trump sent oil markets into an unprecedented buying frenzy on Thursday afternoon, after tweeting that Saudi Arabia and Russia had reached a deal on production cuts.

Russia poured cold water on the details, saying there had been no deal, but it still put oil futures prices on track for the biggest daily rise ever. At the time of writing Brent crude futures prices had gained 22%.

Here are the other important developments from today:

• More than 6.6m Americans filed jobless claims last week, by far the largest number in history and an indication that unemployment could reach a record high. Economists said it was one of the starkest indications yet of the scale of the economic pain already inflicted on the US.
  
• In the UK, the experimental data from the Office for National Statistics said that a quarter of UK companies are already cutting staffing levels “in the short term” due to the coronavirus crisis.
• British Airways confirmed that it will cut capacity by 90% year-on-year for April and May and furlough 30,000 cabin crew.
• British Gas owner Centrica has joined the ranks of companies cancelling their dividends. It also announced £400m in spending cuts this morning.
• National Express cancelled all of its services across the UK.
  

And of course you can continue to follow all of our coverage of the coronavirus pandemic.

In the UK, health secretary Matt Hancock says the government has written off £13.4bn of historic NHS debt:

In the US, New York governor Andrew Cuomo said the state only has enough ventilators in its stockpile to last another six days:

And in our global coverage, cases worldwide are reaching the 1m mark:

Thank you for reading. Join us tomorrow for more live coverage of economics, business and markets. JJ

2 Apr 202013.00 EDT

Joanna Partridge

BT staff are angry that the company is pressing ahead with plans to make around 40 Openreach employees redundant at the end of April as part of a restructuring programme.

Workers and the Prospect union are calling on the company to delay the redundancies, given the current pause in the jobs market, within the company and nationally.
One of the affected team said:

I feel like there is a moral obligation on a company like BT to give us more time to find another role, we’re not asking for them to reverse the decision. Lots of the team have worked for BT for 20-30 years.

The team were first told in March that they would be made redundant. John Ferrett, Prospect national secretary, called BT’s response “tone deaf”.

He added it is “inexcusable in the context of a wider economy that has effectively shut down.”

An Openreach spokesperson said that the redundancies have nothing to do with Covid-19, and out of the 42 people affected, four have accepted new roles and a further four have chosen to take “an enhanced voluntary redundancy leaver package”. They said:

The business is still actively recruiting internally for roles within Openreach and across BT Group, and we’re hopeful that a similar outcome can be achieved for the remainder over the next month as we continue the consultation process with unions and employee representatives.

The company denies that the recruitment process for internal roles has been frozen due to the impact of the coronavirus outbreak.

2 Apr 202012.42 EDT

Julia Kollewe

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We’ve been waiting all day for an announcement from British Airways. The Unite union has put out a statement, saying a deal has been struck, after the two sides had been negotiating for more than a week.

According to the union, the carrier is to suspend 28,000 staff, from cabin crew to ground staff, engineers and head office employees, because of the coronavirus pandemic. Unite says BA will introduce a modified version of the government’s job retention scheme and staff put on furlough will receive 80% of pay, but there will be no cap on earnings.

Workers will be able to divert their pension contributions, worth between 9% and 18% of earnings, into their pay for a short period of time. There will be no unpaid temporary layoffs and no redundancies, and the redundancy process that had already begun has been halted.

At Gatwick and London City airport, all BA staff will be suspended after the airline stopped flying to and from both airports until the end of the virus crisis. It is still running services at Heathrow. The airline employs 45,000 people in total, and has struck a separate deal with its 4,500 pilots, who will take two weeks’ unpaid leave in both April and May.

Oil prices are really volatile. Iraq, another member of Opec alongside Saudi Arabia, has said it backs fellow member Saudi Arabia’s call for a meeting to discuss “balancing” the market.

Brent crude futures prices are up above $30.50. That’s a 23% gain today.

West Texas Intermediate, the North American benchmark, is trading at $25.33 - an increase of more than $5 today. That translates to a 24% daily rise.

It’s swinging by whole percentage points at a time though.

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Production at Nissan’s Sunderland factory, the country’s biggest car plant, (and a totemic part of the Brexit debate) is suspended throughout April.

That continues a shutdown in place since mid-March as the coronavirus outbreak continues across Europe. Reuters reports:

“During this period the majority of plant employees will be furloughed,” the company said, referring to a government scheme covering 80% of wage costs for staff placed on temporary leave, up to 2,500 pounds ($3,100) a month per employee.

Nissan’s sites in Spain are also suspended until further notice, the Japanese carmaker said.

Some of the broadcasters with the biggest global reach have donated advertising space for public health information.

Here’s the info from the Guardian’s Mark Sweney:

Amid that excitement, European stock markets limped to a close, despite the boost to the share prices of their oil producers.

The FTSE 100 gained 0.47% to hit 5,480.22 points. Germany’s Dax increased by 0.27%, while France’s Cac 40 gained 0.33%.

There is some understandable scepticism around Trump’s claim of a deal between Russia and Saudi Arabia.

A production cut of 10m barrels per day would be an enormous - equivalent to nearly half of the two countries’ output.

Multiple outlets have reported that Russian president Vladimir Putin and Saudi Arabian crown prince Mohammed bin Salman have not spoken about any deal. This is from the Financial Times:

After Mr Trump’s tweet, which appeared to be an attempt to corner Russia into agreeing to resume talks with the Kingdom, Mr Peskov told the FT: “there was no conversation” between Mr Putin and Prince Mohammed.

If oil prices remain at these levels until the end of the day it would represent the biggest one-day move in the careers of anyone in the industry.

This table shows the data going back to 1965 for Brent crude oil futures, the North Sea benchmark. As you can see, there hasn’t been a bigger daily move than 14.61% - and I believe that is a record for the contract.

That move in 2019 came when Saudi Arabian oil facilities were attacked.

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Such a big move on the oil markets in such a short time is highly unusual. A lot of people will have made an awful lot of money.

Not least investors in the FTSE 100’s oil companies. Royal Dutch Shell’s two listings on the London Stock Exchange have both gained about 10%, while BP has gained 6.4%.

One of the ironies of the situation though is that low oil prices can act as something of a cushion for struggling economies that still need fuel for transport. But it appears that Trump’s concern may be to protect jobs in the US oil industry.

Saudi Arabia is calling for a meeting of Opec, the cartel of oil producers, and other producers such as Russia to discuss “restoring balance” to the oil market.

Here are the announcements via the Saudi Press Agency:

The output cut could be as high as 15m barrels, Trump adds in another tweet.

The US president seems to enjoy watching his tweets move markets.