That news from BP has seen its shares rise by 2.9% this morning, making it the biggest riser on London’s FTSE 100.
Elsewhere, it’s looking like a mostly positive start to the day on the European stock markets, although the main indices are only nudging slightly higher.
- UK’s FTSE 100 is up about 20 points, or 0.3%, at 7,101
- France’s CAC is up 0.8%
- Germany’s Dax just remains in positive territory, up almost 0.1%
- Italy’s FTSE MiB up nearly 0.1%
- Spain’s Ibex has just edged into the red
- Euro Stoxx 600 has ticked up 0.3%
BP has raised its oil price forecasts for rest of this decade, but lowered them for the longer term, writes the Guardian’s energy correspondent Jillian Ambrose.
You can read her story on BP’s results here:
BP to buy back $1.4bn of shares as rising oil price boosts profits
Now for some corporate news.
Oil giant BP is to hand its shareholders a £1bn windfall through share buybacks, while it is also promising to up its dividend by 4% a year up to 2025.
It comes as the firm is predicting a short-term increase in global oil prices before a quicker than expected shift to low-carbon energy.
Rising global oil prices helped BP make an underlying profit of $2.8bn for the three months to June, up sharply from a loss of $6.68bn in the same quarter last year when Covid-19 brought the oil industry to a standstill.
at 9.08am BST
IMF warns on crypto
Another word on the IMF – it’s repeated its warnings to countries which are planning to use the digital currency as legal tender.
The IMF has previously blogged on the issue, in an article entitled “Cryptoassets as National Currency? A Step Too Far”.
In it, the IMF warns about the volatility of digital cryptocurrencies, as well as how they can be used by speculators.
It also cautions: “The most direct cost of widespread adoption of a cryptoasset such as bitcoin is to macroeconomic stability”.
The blog doesn’t mention El Salvador by name, but the central American country is due to become the first in the world to accept bitcoin as legal tender.
The country’s congress approved the bitcoin proposal – originally made by its media-savvy 39-year-old president in June – and the decision will take effect in September.
President Nayib Bukele has hailed the use of the cryptocurrency as a way of promoting “financial inclusion”, investment and economic development.
There have been concerns that El Salvador’s adoption of bitcoin could complicated talks with the IMF, where it is seeking a financing programme worth more than $1bn.
You can read more about El Salvador’s plans here:
What they said about the IMF announcement.
Following the news about the IMF’s allocation of $650bn special drawing rights – some campaigners are calling for rich nations to donate their share to poorer countries.
Eric LeCompte, executive director at Jubilee USA Network, a US religious development organisation, said developing countries need more aid to get over the crisis prompted by the Covid-19 pandemic.
Wealthy countries receive most of these emergency reserves and must donate them to developing countries. – Eric LeCompte, executive director, Jubilee USA Network
That view is shared by Labour MP Liam Byrne, who represents a Birmingham constituency.
Byrne wrote in the Financial Times earlier this week that the plan would “only work if the IMF’s shareholders now agree three big steps to move the money out of the vaults and into the assault on poverty”.
The SDR is not a “panacea for poverty”, Byrne wrote. But he said their impact could be maximised.
Richer nations must share all of their new SDRs with poorer nations. Because of the way they are allocated, just 4 per cent will flow to poorer nations. Of the new SDR issue, $623bn is set to flow to richer nations, which frankly do not need it. We need a bold proposal to issue these SDRs without the old-fashioned traditions that meant wealthier countries only share 50 per cent of their quotas. The UK should lead the negotiation. – Liam Byrne MP
Introduction: IMF allocates $650bn to help pandemic-hit economies
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
Overnight, the board of governors of the International Monetary Fund (IMF) approved the largest resource injection in its history to boost global liquidity and help countries which are struggling as a result of the pandemic.
The reserve assets – known as “special drawing rights” – total $650bn (£468bn) and become available on 23 August when they will be credited to IMF member countries.
The lion’s share – around 70% – of the allocation will go to the world’s 20 largest economies (the G20), although around $275bn is destined for emerging markets and developing countries, including low-income countries.
The IMF’s managing director Kristalina Georgieva hailed a “historic decision” and a “shot in the arm for the global economy at a time of unprecedented crisis”.
The SDR allocation will benefit all members, address the long-term global need for reserves, build confidence, and foster the resilience and stability of the global economy.
It will particularly help our most vulnerable countries struggling to cope with the impact of the COVID-19 crisis.
The IMF’s Board of Governors approved a new general allocation of SDRs equivalent to US$650 billion. Managing Director @KGeorgieva says it’s a historic decision reached at a time of unprecedented crisis. Read more: https://t.co/x8KCBR7G3l pic.twitter.com/ZYUbZyih4n
The IMF’s plan was delayed last year when the IMF’s largest shareholder the United States – led at the time by President Trump – blocked it, saying the money wouldn’t reach countries that need it. But the US’s position changed under President Biden.
- 8am BST: Spanish unemployment data for July
- 10am BST: eurozone producer prices for June
- 3pm BST: US factory orders for June