Introduction: Russia’s withdrawal will cost Shell up to $ 5 billion
Good morning and welcome to the live rolling coverage of business, economy and financial markets. Withdrawal from Russia is set to cost oil giant Shell up to $ 5 billion, but rising oil prices will ease the blow. Shell said this morning it would write off between $ 4 billion and $ 5 billion (£ 3 billion-3.8 billion £) in assets after its decision to leave Russia after the invasion of Ukraine. The bill covers “impairment of long-term assets” and additional charges, such as debt write-offs and credit losses. Last month, Shell announced that it was withdrawing its stake in all Russian hydrocarbons, including crude oil, petroleum products, natural gas and liquefied natural gas, stopped importing Russian crude oil and closed gas stations. fuel, aviation fuel and its lubricants in Russia. However, Shell also said that its oil and gas business would be boosted by rising energy prices, which have skyrocketed since the start of the war in Ukraine. It states that profits from oil trading are expected to be “significantly higher” in the first quarter of 2022 than in the fourth quarter of 2021. The indicative refining margin is about $ 10.23 / barrel, compared to $ 6.55 / barrel in the fourth quarter of 2021. Transactions in its integrated gas sector are also expected to be stronger than in the previous quarter. Shell will write off up to $ 5 billion in the first quarter as a result of its decision to leave Russia, higher than previously revealed, while oil and LNG trading will be boosted by rising energy prices, he said. @Shell. #OOTT – Ron Bousso (@ ronbousso1) April 7, 2022 Shell ‘s update comes as the UK government announces its long – awaited energy strategy to reduce the country’ s dependence on foreign energy. Nuclear power is at the heart of the strategy, with plans for up to eight new reactors and the goal of increasing offshore wind capacity to make up 95 percent of the country’s “low carbon” electricity by 2030. But there is disappointment that ministers have promised to continue exploiting the North Sea oil and gas and have not announced plans to reduce demand by pushing for insulation. As our news explains: Plans risk angering environmental activists as the opportunity to remove obstacles to more land-based wind farms appeared to fall victim to the Tories’ battles, new drilling in the North Sea won the government’s blessing and ministers opened the door. fracking. Opposition parties have been vocal in their opposition to the strategy. Two former Labor secretaries from the Labor and Liberal Democrats called it “ridiculous” and “desperate” for failing to extend wind power to land or tackle energy efficiency.
THE AGENDA
7 a.m. BST: Halifax Housing Price Index for March 9.30 a.m. BST: ONS publishes the latest business information and economic activity research 10 am. BST: Retail sales in the Eurozone for February 1.15 p.m. BST: Bank of England chief economist Huw Pill speaks at 8th BoE International Government Bonds Conference 1.30 p.m. BST: Weekly US jobless claims
Updated at 08.41 BST 16 minutes ago 09:06
The FCA will create 80 roles to crack down on rogue companies
The city supervisor hires an additional 80 people to fight “troubled companies” and protect customers. The Financial Conduct Authority says its new three-year strategy, announced this morning, will include a push to close troubled companies that do not meet key regulatory standards. The FCA says rising cost of living could lead to greater demand for credit products (as families struggle to pay their bills) and push customers to new ways of “managing and making more money.” He says the new strategy prioritizes resources to “prevent serious harm, set higher standards and promote competition”, adding: The main focus of the strategy is the closure of troubled companies, which do not meet basic regulatory standards. The FCA is hiring 80 employees to work on the initiative, which will protect consumers from potential fraud, mistreatment and create a better market. 26m ago 08: 5634m before 08:48 Shell had previously indicated that withdrawing from Russia would cost about $ 3.4 billion, according to Reuters. Here is their opinion on today’s morning announcement: Shell will write off up to $ 5 billion after its decision to leave Russia, more than previously revealed, while rising oil and gas prices boosted trading activity in the first quarter, the company said in a statement. company on Thursday. Post-tax impairments of between $ 4 billion and $ 5 billion in the first quarter will not affect the company’s profits, Shell said in a statement ahead of its May 5 earnings announcement. Shell, which has a market capitalization of about $ 210 billion, had previously stated that impairments in Russia would reach about $ 3.4 billion. The increase is due to additional potential effects around contracts, write-offs and credit losses in Russia, a Shell spokesman said. Shares of Shell fell 1.2% at the start of trading in London. The beginning of 2022 marked one of the most turbulent times in recent decades for the oil and gas industry, as Western companies, including Shell, quickly withdrew from Russia, severing trade ties and ending joint ventures after Moscow’s invasion of Ukraine. . Shell said it would withdraw from all Russian operations, including a large liquefied natural gas plant on the Sakhalin Peninsula in the east of the country. Before 35 meters 08:47 Back to Shell … the oil giant says this morning: Shell has not renewed long-term contracts for Russian oil and will only do so under explicit government guidance, but we are legally obliged to receive crude oil purchased under pre-invasion contracts. Shell also told the City that there was “unprecedented volatility in commodity prices” in the first quarter of the year. 43 minutes ago 08:39
Housing prices: What the experts say
Affordable housing is a growing concern for prospective buyers, says Myron Jobson, senior personal finance analyst at interactive investor: It depends largely on three factors: house prices, household income, and mortgage rates. All three have gone up, but the two that reduce the affordable price (housing prices and mortgage rates) combined outweigh the increase in household income – the sector that increases affordability. “Rising house prices mean buyers have to save more on deposits than before the pandemic. The cost of living crisis is making things worse, reducing disposable income, making it harder to save on a deposit. The possibility of higher interest rates to combat rising inflation means that for those who want to buy their first home, the situation will become more difficult. “Fast-growing rents offer no relief and could keep some sought-after homeowners on the hunt for a home for longer than they would like.” Brickweaver real estate agent Emma Fildes says the search for “new beginnings” has raised average home prices by .5 43,577 since the first lockdown. According to @HalifaxBank AVG, house prices in the UK rose significantly in the spring to March, including 1.4%. Setting a new record in AVG property prices £ 282,753. Buyers, due to pandemic, the search for “new beginnings” has led to an AVG inc cash £ 43,577 in the last 2 years. pic.twitter.com/PFC3lm3FCA – Emma Fildes (@emmafildes) April 7, 2022 Charlotte Nixon, a mortgage expert at Quilter, predicts that worries about the war in Ukraine and rising interest rates will “put a brake” on uncontrollable housing prices. The situation in Ukraine remains volatile and the cost-of-living crisis is becoming more pronounced day by day, especially as the energy price ceiling and rising national insurance have come into play. Given the increased financial instability, first-time buyers and prospective home movers will probably think twice before embarking on the expensive process of buying a new home. “In addition, the Bank of England is expected to raise interest rates further, which will further reduce people’s spending power. Prior to the outbreak of the war in Ukraine, inflation was expected to peak at 7.25%, this is now likely to be significantly higher and the only way to combat it is with increased rates. If this happens, the already declining number of cheap mortgage rates will quickly disappear and the monthly cost will increase rapidly. If as a result fewer people want to move into their home, the cost of housing prices may eventually start to slow down. Housing shortages will prevent prices from falling this year, suggests Mike Scott, chief analyst at Yopa Real Estate: There has been some expectation of a slowdown in house prices this year, but it is clear that this has not yet happened. The combination of limited supply, high demand and interest rates that remain at historically low levels despite the recent increase in the key interest rate continues to push prices higher. Yopa expects growth to slow in the second half of the year as interest rates rise further and cost of living increases begin to bite. However, we do not expect the market to be completely reversed, with prices starting to fall, as it will take more than a year for the stock of homes to be rebuilt to a more normal level. 55 meters before 08:27 South West England surpassed Wales as the UK’s strongest performance in terms of annual house price inflation. Prices in the southwest increased by 14.6% last year, bringing average home prices there to a record £ 298,162, according to Halifax. Home prices in Wales have risen 14.1% in the last year, reaching a record 1. 211,942. 1 hour before 08:19 Since the first pandemic lockdown began two years ago, the average home price in the UK has risen by a staggering £ 43,577, or 18%. In March 2020, in the first wave of Covid-19, it was hard to imagine such an explosion in house prices (honestly, who was thinking about house prices anyway?). But the market has proven to be surprisingly resilient, backed by measures such as …
