Introduction: Oil prices set for steepest weekly drop since February
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price is on track for its biggest weekly losses in three months, bringing relief to consumers and central bankers alike.
Crude oil prices have fallen by over 6% so far this week, helped by easing tensions in the Middle East and uncertainty about demand for energy. That would be its worst week since the start of February.
After hefty losses early this week, Brent crude is trading around its weakest level since mid-March, at below $84 per barrel, having ended last week near $90 per barrel.
The Brent crude oil price over the last 12 months Photograph: LSEG
Hopes for a deal to bring about a ceasefire in Gaza, and free the remaining hostages held there since the October 7 attacks, have risen this week. US secretary of state, Antony Blinken, told Israel and Hamas that “the time is now” for a deal, during his seventh visit to the Middle East since last October.
A ceasefire, if agreed, would cut risks to oil supplies from the region.
The oil price also weakened after US stocks of crude oil climbed unexpectedly this week. The US Energy Information Administration (EIA) reported that energy firms added a surprise 7.3 million barrels of crude into stockpiles during the week to April 26.
The EIA also reported a surprise 0.3-million barrel build in gasoline inventories; analysts had expected gasoline stocks would decline by 1.1 million barrels.
David Morrison, senior market analyst at Trade Nation, says:
Added together, the data show that the US market has plenty of supply, and crude prices fell to reflect this.
Oil has also been hit by fading hopes for early cuts in US interest rates. Lower borrowing costs should boost oil demand, but that seems less likely given the stickiness of US inflation.
Also coming up today
Financial markets are bracing for the latest US Non-Farm Payroll – the monthly healthcheck on America’s jobs market, due at 1.30pm UK time.
Economists expect a slowdown in job creation; the NFP is expected to rise by 238,000, down on the 303,000 gain in March. The jobless rate is tipped to remain at 3.8%.
Attention will also focus on wage growth, which is expected to slow slightly to 4%, from 4.1% in March.
The agenda
7.45am BST: French industrial production for March
9am BST: Norges bank interest rate decision
9.30am BST: UK services PMI report for April
1.30pm BST: US non-farm payroll for April
3pm BST: US services PMI report for April
Key events
Rail ticket platform Trainline are the top riser on the FTSE 250 after doubling its operating profits in the last year.
Trainline reported that its operating profits rose by 101% in the year to 29th February, from £28m to £56m.
Trainline, which says it is now Europe’s most downloaded rail app, grew its net ticket sales by 22% in the last year.
And interestingly, the company tells shareholders that the Labour party have told Trainline that they have “no plans to revive the current Government’s previous proposal for a national retailing website and app”.
Last December, Trainline’s share surged when the Department for Transport scrapped plans to create a Great British Railways ticketing website and app.
With Labour pledging to fully nationalise the train network within five years of coming to power, there had been thoughts that the app plan could be revived.
Trainline’s shares are up almost 7% this morning, as those fears are shunted aside.
Richard Hunter, head of markets at interactive investor, suggests the London stock market has further to climb:
US markets may have lost some of their mojo but the same cannot be said for a flourishing FTSE100, where opening strength lifted gains in the year so far to 6%.
The mixture of technical factors, such as rising commodity prices and higher interest rates underpinning the likes of the mining, oil and banking sectors has been combined with improving sentiment towards the premier index.
Even at these elevated levels at or around record highs, the valuation of the index remains undemanding in comparison to many of its peers which could suggest that the recent rally still has some way to go.
FTSE 100 near all-time high
In the City, the blue-chip share index has nearly hit a new alltime high at the start of trading.
The FTSE100 index has jumped by 24 points, or 0.3%, to 8197 points – only slightly below the intraday high of 8199.95 points set on Tuesday.
AngloAmerican is the top riser riser, up 3.3%, after Reuters reported last night that commodities group Glencore was studying an approach for Anglo.
The main highlight today will be the US jobs report for April, predicts Jim Reid, strategist at Deutsche Bank.
He explains:
This will be an important release for the Fed as well, since the resilience in the labour market has enabled them to keep the focus on inflation.
Indeed, the March report showed nonfarm payrolls rise by a 10-month high of +303k, whilst the 3-month average growth was at a 12-month high of +276k.
However, even as the nonfarm payrolls numbers have been strong, other indicators have pointed to growing weakness in the labour market, and this week’s JOLTS report for March showed that both job openings and the quits rate were down to their lowest in over three years.
In terms of what to expect today, our US economists expect nonfarm payrolls growth to moderate to +240k in April, with the unemployment rate unchanged at 3.8%
A chart showing weekly changes in the Brent crude oil price Photograph: LSEG
Introduction: Oil prices set for steepest weekly drop since February
Good morning, and welcome to our rolling coverage of business, the financial markets and the world economy.
The oil price is on track for its biggest weekly losses in three months, bringing relief to consumers and central bankers alike.
Crude oil prices have fallen by over 6% so far this week, helped by easing tensions in the Middle East and uncertainty about demand for energy. That would be its worst week since the start of February.
After hefty losses early this week, Brent crude is trading around its weakest level since mid-March, at below $84 per barrel, having ended last week near $90 per barrel.
The Brent crude oil price over the last 12 months Photograph: LSEG
Hopes for a deal to bring about a ceasefire in Gaza, and free the remaining hostages held there since the October 7 attacks, have risen this week. US secretary of state, Antony Blinken, told Israel and Hamas that “the time is now” for a deal, during his seventh visit to the Middle East since last October.
A ceasefire, if agreed, would cut risks to oil supplies from the region.
The oil price also weakened after US stocks of crude oil climbed unexpectedly this week. The US Energy Information Administration (EIA) reported that energy firms added a surprise 7.3 million barrels of crude into stockpiles during the week to April 26.
The EIA also reported a surprise 0.3-million barrel build in gasoline inventories; analysts had expected gasoline stocks would decline by 1.1 million barrels.
David Morrison, senior market analyst at Trade Nation, says:
Added together, the data show that the US market has plenty of supply, and crude prices fell to reflect this.
Oil has also been hit by fading hopes for early cuts in US interest rates. Lower borrowing costs should boost oil demand, but that seems less likely given the stickiness of US inflation.
Also coming up today
Financial markets are bracing for the latest US Non-Farm Payroll – the monthly healthcheck on America’s jobs market, due at 1.30pm UK time.
Economists expect a slowdown in job creation; the NFP is expected to rise by 238,000, down on the 303,000 gain in March. The jobless rate is tipped to remain at 3.8%.
Attention will also focus on wage growth, which is expected to slow slightly to 4%, from 4.1% in March.
The agenda
7.45am BST: French industrial production for March
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