Investors cautious as oil slides back into the black

AFTER two weeks of watching the oil price in free fall, investors now want to know what the repercussions will be.

Global giants such as Saudi Aramco, Chevron and BP have said they will need to cut spending. But traders’ eyes turned to the North Sea yesterday, after industry body Oil & Gas UK warned the region faces an ‘unprecedented’ crisis that could see some firms go under.

In an unscheduled trading update, Enquest sought to take what it described as ‘quick and decisive action’ to cut costs across the business. This will include not restarting production at two projects, Thistle and Heather, where it had to put operations on hold last year for repairs. And exploration group Hurricane Energy also sought to reassure investors, saying it is reviewing its spending plans amid the recent slump, which has sent prices to a 17-year low.

Prices were already falling as the coronavirus outbreak started spreading, but were tipped over the edge when Saudi Arabia kicked off a price war with Russia.

The oil price jumped 7pc to around $26 a barrel last night, but was still almost half what it was at the start of this month.

Enquest shares rose 2.9pc, or 0.23p, to 8.16p, Hurricane’s rose 12.6pc, or 1.18p, to 10.48p.

BP, which late on Wednesday said it would provide free fuel to the emergency services, rose 3pc, or 7.05p, to 240.75p, while North Sea oilfield services provider

Hunting slumped 12.7pc, or 24.7p, to 169.8p.

Investors also seemed to reward proactive approaches to the coronavirus pandemic in other sectors.

AIM-listed Escape Hunt, which operates escape room games, surged 27.3pc, or 0.75p, to 3.5p, as it announced plans to put the business into ‘hibernation’ until the outbreak is over.

Also on the junior market, cinema operator Everyman Media rocketed 22.1pc, or 18p, to 99.5p, as it told investors it still has financial headroom and expects to bounce back in the longer term once the pandemic has passed. It shut the doors to its 33 cinemas on Tuesday. In a less-extreme move, Metro

Bank shares rose 6.1pc, or 4.8p, to 82.85p after it shortened branch opening hours. This prompted the lender to apologise for temporarily going back on a promise to serve customers whenever it was convenient for them.

Chemicals group Elementis saw its shares climb a whopping 123.7pc, or 22.65p, to 40.96p after it slashed its dividend in a ‘prudent’ move and three directors spent as much as £20,000 each buying shares in the group.

Online gaming group Playtech

(down 0.7pc, or 1.05p, to 140.3p) also played it safe by scrapping its dividend, as it braced for hits from the mass cancellation of sporting events and the likely disruption to its online casino games, which require people to be working in the same location.

On The Market received less praise from investors, with its stock finishing flat at 39.5p, after it slashed its fees by 33pc. Conference call service provider

Loop Up – which always stood to benefit from a mass migration to at-home working – rallied 44.9pc, or 18.9p, to 61p after it said it had seen user numbers surge since the pandemic began. A choppy trading day for the

FTSE 100 saw it eventually close in the black after the Bank of England announced mid-afternoon that it had cut interest rates to the lowest level in history, from 0.25pc to 0.1pc. The blue-chip index ended 1.4pc higher, or 71.03 points, at 5151.61.

The FTSE 250 made the reverse move – falling 1.4pc, or 178.49 points, to 12829.7.