Oil prices tumbled by 6 per cent yesterday amid hopes that there could be a breakthrough in talks between Russia and Ukraine and as a resurgence of Covid cases in China threatens to dampen demand.
Brent crude, the global benchmark price, was down at about $106 a barrel last night, having hit highs of as much as $139 a barrel last week as the Ukraine crisis escalated — levels not reached since 2008.
Last week the United States imposed an embargo on Russian oil, while Britain vowed to end imports by the end of the year. At the same time, many energy companies voluntarily stopped buying Russian oil, leaving the market scrambling to find alternative supplies and leaving prices highly volatile.
Oil prices are expected to continue to moderate this week as investors digest the impact of sanctions on Russia, along with tentative signs of negotiation towards a ceasefire.
Boris Johnson, the prime minister, is preparing to visit Saudi Arabia to urge it to pump more oil.
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Yesterday Johnson met chief executives and senior leaders from oil and gas companies operating across Britain to urge them to keep investing in the North Sea and to increase domestic gas production.
Those at the meeting are understood to have included Bernard Looney, the chief executive of BP, Sam Laidlaw, the chairman of Neptune Energy, and David Bunch, the Shell UK country chairman. Companies including Equinor and TotalEnergies were also represented.
No 10 said that the prime minister and the leaders had discussed “how the UK can remove barriers facing investors and developers, and help projects come online more quickly” and had “agreed to work together going forwards to help accelerate this further”.
One source said that companies had raised concerns over banks’ reluctance to finance oil and gas and welcomed a change in tone from the government, which has been more positive to the industry since the conclusion of the Cop26 climate summit and amid rising concerns over energy security.
•Trading in nickel is set to resume tomorrow at the London Metal Exchange after Tsingshan Holding Group, the world’s largest producer, reached a deal with its bank counterparties to resolve a bet. Last Tuesday, the LME suspended nickel trading after its price briefly doubled to more than $100,000 a tonne. The surge was driven by a giant short wager made by Xiang Guangda, a Chinese billionaire behind Tsingshan.
