We’ve caveated the plunging West Texas Intermediate price a few times: the futures contract for May delivery expires tomorrow, so a lot of traders are looking at the June contract.

But this is not normal. It is the biggest one-day drop since the WTI futures contract, the US benchmark, was introduced in March 1983.

Today’s low on the WTI May contract is now $10.77. If it goes lower than $10.35 it will be the lowest since April 1986, the only month in the contract’s record when prices fell below $10 per barrel.

There is quite a striking contrast with the WTI contract for June delivery, which is trading at $22.51 - although that is still down by almost 11% today. That spread between the front-month and the second-month contract is itself a record (and the spread was briefly higher than the actual contract price, which is quite extraordinary).

It’s what the industry lovingly (and to outsiders, bafflingly) refers to as “contango”, when futures are more expensive than the actual spot price of a barrel of oil. That means that traders will pay a premium to get the commodity at some point in the future because the price of storage is much too high in the short term.

Kit Juckes, global fixed income strategist at Société Générale, said:

The contango in WTI prices is extraordinary. August WTI is more than twice as expensive as May. The chart shows the front contract divided by the 4th. Too much oil, with nowhere to put it. [...]

This will put more pressure to reduce supply and the pressure may be felt most, under the circumstances, in North America.

Nobody wants to be left with oil they can’t store when the music stops, as it is threatening to...

There were also some interesting comments earlier from Bank of England chief economist Andy Haldane, addressing the concerns that government-backed loans are not getting through to companies quickly enough.

Speaking at a briefing for businesses this morning, he said that the coronavirus business interruption loan scheme’s problems are no secret, and that help is not getting at the pace needed to help the economy.

Haldane also said that while most businesses had been able to hang on to existing lines of credit, fewer loans are being extended than the economy needs.

The government was considering 100% guaranteed loans to speed the pace that banks would give them out, he added, according to the wire report. That would mean banks would not have to worry as much about the risks attached when lending.

The pace of lending has been remarkable, but then these are remarkable times:

The Bank of England has been wielding a mixture of carrot and stick towards the banks during this crisis (perhaps more of the latter) and it seems to have worked so far: financial markets have for the most part functioned.

New guidance for lenders suggests that Threadneedle Street is not yet satisfied by what the sector is doing. The Bank’s Prudential Regulation Authority (PRA) today said it expects banks to focus on continuing to support customers, even if that means using some of their buffer space. Via Reuters:

Banks are expected to use their liquidity buffers in doing so, even if it means liquidity coverage ratios go significantly below 100%.

The PRA said they would give lenders sufficient time after the crisis to replenish their liquidity and capital buffers, which they are forced to hold in better times in case of catastrophe - one of the lessons learned from the financial crisis 12 years ago.

Startups probably get more coverage than they warrant on the whole, but then they are seen as a key source of the kind of innovation that’s important for an economy’s long-term prosperity. That’s why the government is stepping in with support.

Fast-growing UK companies will be offered £1.25bn in taxpayer-backed loans, as the government attempts to protect emerging sectors of the British economy during the coronavirus pandemic, writes the Guardian’s economics correspondent, Richard Partington.

In the latest intervention to cushion the unfolding economic blow, the chancellor, Rishi Sunak, said the financial package would help support technology and life sciences firms so they could continue to develop innovative products, powering UK growth in future.

You can read the full report on who is eligible for support here:

Sir Richard Branson has faced mounting criticism for pleading for taxpayers’ cash, rather than using his own fortune to rescue the airline.

Now he has pledged to put up his private Caribbean island as collateral to raise money in a blog post pleading for a government bailout.

You can read the full report here:

Activitst are not happy. Here is Fiona Nicholls, a climate campaigner for Greenpeace UK:

Richard Branson’s letter failed to convince us that suing the NHS wasn’t bad for the health service, moving his money to a tax haven wasn’t to avoid tax, or that emitting millions of tonnes of pollution wasn’t bad for the environment.

There are still no justified grounds to give Virgin an unconditional bailout. Public money should be used for public goods. That should include improving workers’ rights and protections, cutting back on bonuses and dividends, and limiting flights to a level compatible with the Paris Agreement.

If we allow polluting industries to use the pandemic to dodge their responsibility to cut carbon, we will be turning a global crisis into a catastrophe.”

And US stock market futures are also indicating pain ahead for Wall Street.

S&P 500 futures prices are down 1.8%, Dow Jones industrial average futures prices are down 1.9%, and those for the Nasdaq have lost 1.1%.

A quick round-up of market news as we approach lunchtime in London.

• The FTSE 100 has lost the brief bursts of good mood seen this morning, falling by 1.3% by early afternoon. The oil price fall has not helped the heavyweight energy sector.
  
• The mid-cap FTSE 250 has lost 0.8% - consumer-facing companies are the big losers, along with oil services.
• The Euro Stoxx 600 has lost 0.4%. Germany’s Dax has lost 1.3%, while France’s Cac 40 is also down by 1.3% and Italy’s FTSE MIB has lost 1.5%.
• West Texas Intermediate crude oil futures have lost even more ground. The latest low point is $12.41 per barrel for May delivery. (N.B., the contract expires tomorrow.)
• Brent crude futures have lost 5% to hit lows of $26.50 per barrel.

What do investors know about pandemics? No more than the average person on the street, for the most part. So don’t take the below chart as a forecast - but it is a useful indicator of worsening market sentiment.

Deutsche Bank’s survey of market participants has found that the outlook for a return to normal life has worsened:

While in early to mid-March expectations were that we would see life normalise over the summer, now 60% of respondents do not believe we will return to normal until September at the earliest.

But bear in mind this puzzle/warning about the sometimes arbitrary functioning of markets:

Interestingly the equity market has surged since this last survey even though the reality of the new slow return to normal emerges.

Britain in lockdown: new spending data from Starling Bank, based on 1.25m accounts, reveals that video gaming on Playstation and Nintendo is up by 300% while Amazon purchases rose 39% in recent weeks.

The bank looked at its customers’ seven-day spending between the week to 15 March and that ending 5 April. Deliveroo sales were flat over that period, but some retailers saw big increases in spending: Argos (+49%), Asos (+12%), John Lewis (+13%) and Apple Store (+36%).

People spent most in London, the south east and south west.

Britons are also splashing out on home cooking appliances, according to the market research firm GfK. In the week 29 March to 4 April, purchases of deep fryers jumped 76.4% in value compared to the same week last year, while hot beverage makers steamed in at 65.4%.

There was a 62.1% rise in purchases of sandwich makers, waffle makers and grills while mixers and food processors were also in high demand, up 61.5%.

The bakery chain Pain Quotidien is reportedly close to collapse as it tries to find a buyer.

The company, which has 26 UK sites, could appoint administrators as soon as this week, according to Sky News. It reported:

An emergency sale process for the business, which trades from 26 sites in Britain, has set a deadline of Wednesday for offers.

Alvarez & Marsal, the professional services firm, is overseeing the auction and is likely to be appointed as administrator unless a solvent sale is concluded in the coming days, insiders said on Monday.

Primark has agreed to pay an additional £370m to suppliers to cover stock in production or yet to be delivered after criticism for cancellation of orders during the coronavirus crisis.

The cut price fashion chain, which has been forced to close stores around the world as part of efforts to control the spread of the virus, does not have an online outlet and has joined many rivals in cancelling orders from suppliers as stocks mount up in its warehouses.

The company had previously committed to pay for orders that were in transit or booked for shipment by 18 March. It has now extended that commitment by another month until 17 April bringing the total amount of stock committed to or held to £2bn.

The retailer said it hoped to begin placing future orders for autumn/winter stock once there was further clarification of the reopening of stores.

Metro Bank has promised to refund customers more than £11.4m after failing to send the right information about unarranged overdraft charges to customers in their text alerts.

The Competition and Markets Authority (CMA) said that while the bank texted customers to let them know they would end up entering into an unarranged overdraft, it failed to tell around 130,000 customers that they would be charged as a result. Some of the alerts were also sent later than they should have been.

The breach has been ongoing since February 2018, according to the CMA. As is often the case, the CMA has been careful in its wording: it has not called this an order or a fine, but said Metro had instead “committed to repay” affected customers £10.5m in fees, plus 8% interest on the charges. The lender will also consider “reasonable claims” for customers who were hit with extra costs as a result of the charges.

HSBC, Santander and Nationwide last year agreed to pay back millions of pounds to customers over similar breaches.

David Thomasson, chief commercial officer at Metro Bank, said:

We are very sorry that we didn’t include all the information we should have done on our overdraft text alerts, and that on certain occasions some customers did not receive these alerts before 10am as they should have done. This isn’t the level of service that we pride ourselves on providing and we are now contacting any customers who have been impacted to put things right for them as quickly as possible.

Hopes for the future for British households also look to have been severely curtailed, if the job security reading in IHS Markit’s household finances index is anything to go by.

The reading fell off a cliff to by far its lowest since the survey began (although bear in mind that it was founded after 2008, when uncertainty during the financial crisis was at its highest).

This reading was taken in the first week of April, so there could well be more pain to come.

Joe Hayes, an economist at IHS Markit, said:

The UK Household Finance Index is already showing wide-reaching financial consequences of the lockdown measures implemented in late March.

Around one-in-three UK households reported a decline in income from employment during April, which was by far the largest number since the survey began in 2009.

But Hayes is still seeing the slimmest of silver linings:

Nevertheless, we can still draw a small degree of positivity from the latest results, with overall measures of cash available to spend and household debt proving much more stable than workplace incomes. There was a slight pick-up in unsecured lending needs, while in some cases savings were depleted to meet immediate financing needs.

Limiting the adverse impact on UK household balance sheets will be crucial in the coming months so that when economic activity does recover, consumers are not stuck repaying debts and instead are able to boost discretionary spending to aid a strong recovery.

There were almost 70,000 applications for the state wage support in the first half hour of the portal being open, according to the head of HM Revenue and Customs.

This is from the Financial Times (£) write-up of HMRC Jim Harra’s appearance on BBC radio earlier:

Harra said that the website was working, with about 67,000 claims from employers before 8.30am. He said: “We have scaled our IT system to cope with the maximum number of claims. There are over 2m PAYE schemes and our system is big enough to handle a claim from every one of those.”

This morning is an important day for the UK government’s efforts to cushion the blow of the lockdown recession: the launch of the furlough scheme that will allow companies to claim back 80% of the wages of employees not working.

Under the scheme, the government will cover 80% of workers’ wages, up to £2,500 a month, if they are not working but kept on their employers’ payroll, reports the Guardian’s Julia Kollewe. Workers across the economy have been furloughed because of the Covid-19 lockdown.

The system can process up to 450,000 applications an hour. Employers should receive the money within six working days of making an application, the Treasury said.

HM Revenue & Customs has deployed 9,500 staff to deal with queries, including 5,000 on web chat, but there are fears that the website could crash and that telephone lines could also be overwhelmed.

You can read the full report here:

The selloff in US crude oil futures was a brutal 21% in early Monday trade, and there is little sign of any imminent recovery, with West Texas Intermediate May prices still bumping along below $15 per barrel.

“Don’t panic,” suggest analysts led by Mark Haefele, chief investment officer in UBS’s wealth management arm. They forecast prices of WTI and Brent crude of $20 per barrel at the end of June, and over $40 per barrel at the end of the year.

The volatile trade comes amid fears US storage facilities could soon max out, leaving markets watching both domestic production and inbound crude tankers due for US ports. If the current pace of the inventory build continues, we could see US tanks
hit max capacity roughly by the end of June.

But the sharp swing in the front month contract also reflects thinned trade, with most of the market already shifting to the June contract before the Tuesday rollover.

But oil prices could be the last of the major asset classes to recover from the coronavirus crisis, cautioned Stephen Innes, global markets strategist at foreign exchange trader Axicorp.

Regardless of what OPEC does, there will be structural demand loss for oil due to less travel. At a minimum, oil prices will be the last asset class to recover from lockdown. End transport demand will only occur in the final stages of reopening when border crossing is allowed, and travel restrictions get lifted. People will then flock again to planes, trains, and automobile

One possible explanation for the bumpy ride on the FTSE 100 this morning (it is now mildly negative): the prospect of the UK easing restrictions appears to be fairly distant.

Culture secretary Oliver Dowden is doing the media rounds this morning. He confirmed that the government is reluctant to lift the lockdown for fear of sparking a second wave of infections, telling BBC Breakfast:

The worst thing we could possibly do would be to prematurely ease the restrictions, and then find a second peak and have to go right back to square one again, potentially with even more draconian measures.

You can follow more on the UK coronavirus live blog:

The positive start to the week on European stock markets was very short-lived indeed: the major indices are now negative today.

The FTSE 100 is down by 0.3%, and the Stoxx 600 is down by 0.2%.

The other big mover on the FTSE 350 is Aston Martin Lagonda, as the struggling carmaker got away a rights issue. Shares are up by 12% at 65p (although still barely a third of where they were at the start of the year).

Billionaire investor Lawrence Stroll, who led the bailout, also takes over as executive chairman of Aston Martin’s board today. He is also joined on the share register by Mercedes-Benz F1 boss Toto Wolff.

Stroll said:

The rights issue and the investment that I, and my co-investors in the consortium, have made has underpinned the financial security of, and our confidence in, the business. We can now focus on the engineering and marketing programmes that will enable Aston Martin to become one of the preeminent luxury car brands in the world.

In this first year we will reset the business. Our most pressing objective is to plan to restart our manufacturing operations, particularly to start production of the brand’s first SUV, DBX, and to bring the organisation back to full operating life. We will do this in a way that ensures we will protect our people, wherever they work - their safety is our overwhelming concern.

Interesting timing on this announcement from spreadbetting company Plus 500: its chief executive has just resigned. Shares are down 7%, making it the biggest faller on the FTSE 350.

Spreadbetting companies have seen a remarkable boom during quarantine measures, as historic market volatility coupled with the fact of millions of people being locked inside have contributed to an enormous surge in revenues.

Asaf Elimelech, Plus 500’s chief executive, “tendered his resignation from the board and the company with immediate effect”, the company said in a statement to the stock market. However, he has a year’s notice period so will work alongside his successor to hand over.

The FTSE 100 has gained 0.4% in the first exchanges in a relatively gentle start for these volatile times. FTSE 100 investors endured a rocky ride last week, with the index falling back before recovering some of its losses on Friday.

In Germany the benchmark Dax gained 0.7%, while France’s Cac 40 gained 0.7% and Spain’s Ibex rose by 0.6%.