Oil firms take a beating as crude falls below $30

OIL companies were hammered as the price of crude slumped below $30 a barrel.

Shares in Shell and BP – two of the largest firms listed on the London Stock Exchange – slid as oil prices edged towards lows they last touched during a major commodity crisis four years ago.

The oil market had already been hit with a double whammy of plunging demand and increasing supply. It had almost halved from $59 a barrel before the coronavirus outbreak took hold of markets as widespread travel restrictions and a price war kicked off between Saudi Arabia and Russia. But it plunged further yesterday as traders digested the extended travel ban between the US and Europe announced over the weekend.

Saudi Arabia’s state-backed oil firm Aramco also confirmed it would ramp up production.

During Aramco’s first ever results call yesterday, chief executive Amin Nasser said: ‘In a nutshell, Saudi Aramco can sustain the very low price and can sustain it for a long time.’ Aramco may be prepared for the long haul – but investors in London-listed firms were spooked by the latest toxic cocktail to put pressure on black gold.

Shell shares closed down 7.4pc, or 80.4p, to 1003.4p, while BP fell 6.1pc, or 16.95p, to 259.35p.

They have shed 55pc and 45pc of their value so far this year respectively.

FTSE 250-listed Cairn Energy fell 2.2pc, or 1.5p, to 67.55p, as

Energean dropped 7.9pc, or 28.5p, to 331p. Fellow mid-cap group Premier

Oil bucked the trend, rising 2.1pc, or 0.34p, to 16.34p after it reassured investors last week its books were strong enough these days to hold up against a drop in prices.

Tullow Oil dived 16.2pc, or 1.76p, to 9.15p, as the ailing exploration firm was downgraded to ‘underperform’ by analysts at Royal Bank of Canada who scythed its target price from 100p to a mere 20p in a note titled ‘Final Straw’.

Following another brutal day, the FTSE 100 fell 4pc, or 215.03 points, to 5151.08, while the

FTSE 250 dived 7.8pc, or 1212.25 points, to 14349.75.

Elsewhere, investors are also worried the difficult markets could affect Laura Ashley’s chance of survival.

Weekend reports it was looking to secure more emergency help in the coming weeks were compounded by a round of boardroom musical chairs yesterday.

Professor Jane Rapley and Leon Yee have resigned as independent non-executive directors and Chan Choung Yau, group executive of Laura Ashley major shareholder MUI Group, has been appointed a non-executive director.

Shares in the floral wallpaper maker sank 24.7pc, or 0.32p, to 0.98p. In other board moves,

former Marks & Spencer finance boss Helen Weir will step down from the board of Cineworld in May, despite only joining as a nonexecutive director in November 2019. The debt-laden cinema chain’s stock tumbled 15.1pc, or 6.69p, to 37.51p.

But BT Group inched up 0.6pc, or 0.64p, to 112.94p, as it said Barclays chair Sir Ian Cheshire will join as a non-executive director with immediate effect and Lloyds Bank director Sara Weller will join in July.

Computacenter fell 0.8pc, or 11p, to 1386p, as UBS analysts upgraded it to ‘neutral’ from ‘sell’ on the grounds that it was a ‘defensive business’ that moved quickly to protect itself back in the 2009 financial crisis, boding well for the pandemic.

Sirius Minerals will bid the stock market farewell today after shareholders waved through a £405m takeover by Anglo American (down 3.4pc, or 45.6p, to 1290p).

Its shares were suspended yesterday, though the offer price was 5.5p per share.