Crude oil prices tumbles between gains and losses

US crude-oil futures was stuck between gains and losses today just before the release of weekly US oil inventory data. Light, sweet crude futures on the New York Mercantile Exchange traded 7 cents up earlier this year in February at $53.68. In the same month on London’s ICE Futures exchange the Brent crude was higher, but however it returned to the red. The drop was 15 cents to $57.74 a barrel then.

The weekly US oil inventory data is to be published later today by the American Petroleum Institute. A more closely watched data will be followed on Wednesday from the US Energy Information Administration. Analysts expect there will a decline of 1.25 million barrels for the week that ended on December 26.

The winter demand is strong and so the oil inventories will typically decline and stockpiling due to high production will bring down the prices of oil further lower.

In November US has produced the same amount of oil as Saudi Arabia.

Meanwhile, the oil prices still seems to troll downward and soon it will be to the bottom. The tumbling started in June this year.

The US oil producers now seems scaling back with drop in onshore drilling-rig count, which will be the third consecutive week.

Yesterday Nymex crude settled for lowest since May 1, 2009. In June it was $107.26, a 52-week high. Since then a lost of 50 percent is seen, and considered to be the quickest drop.

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UK property market slows; Analysts say to bounce back again

UK house price growth has again slowed down, third month in a row. Last month, across the country, the prices grew by 8.5 percent, lower than that of October.

In October the house prices rose by 9 percent, if followed the data of Nationwide.

Even though November saw a small growth in house prices, but gradual slowdown is a matter of concern. It is also said the London’s housing market is coming down more significantly than the entire country.

According to chief economist at Nationwide, Robert Gardner, in recent months the housing market activity levels have been weak.

He added further that number of mortgages approved for house purchase dropped by around 20 percent in September that was below the level prevailed during the start of the year. Similarly the housing market rates too are far below the long-term averages.

There is no reason for the UK property market to slow down at this time as the economy is growing healthy and also around two million more people now have jobs after the coalition government coming to power. So, there may be something of disconnect between the two.

Meanwhile, analysts feel the slow down should not be of concern and they are quite positive that the UK property market will grow up smoothly soon.

It is expected the residential prices will be bouncing back again in near future. The main reasons for this are that employment in the country is up and affordability too.

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Banks not to be responsible for next financial crisis: BoE former Governor

Bank of England former Governor said on Monday banks won’t be responsible for next financial crisis as they have not yet recovered completely to the same that occurred in 2008.

Lord King warned because of the prolonged low interest rates. He said the banking system now seems safer but yet a point is to be made where it is completely safe.

He said it does not make sense to go indefinitely with very low interest rates and there has been little progress in solving different world economies imbalances problem.

However, talking to BBC Radio 4’s Today programme King also safely mentioned that he is not suggesting for any immediate rise in borrowing cost as the action may be too early and it resulted with another downturn.

He also talked about the Lehman Brothers collapse in late 2008 and said financial markets never thought the banks were at risk, but it was surprising to learn that people found the markets not trusting banks anymore.

About the earlier crisis he said it was very complicated and several aspects were attached to it. Even the response of Bank of England as well as of the Federal Reserve was complex too. There were several moving parts and he then felt to be a pilot in a cockpit who was always alert and tried keeping eyes on every light that was turning red.

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Oil drops to new low in half decade

Oil has dropped to a new low in more than five years and now it is being speculated to remain close to same through the first half of 2015.

West Texas Intermediate fell up to 2.2 percent and there does not seem to be any earlier gain.

Six tanks were set ablaze by militants earlier at Es Sider, the largest oil post in Libya, but only three have been managed to be extinguished says National Oil Corp. spokesman Mohamed Elharari.

It is reported the Algerian Energy Minister Youcef Yousfi had called on OPEC in cutting the production of the oil so that there can be boost in its prices.

In 2014 the futures had plunged 46 percent, which is the biggest annual drop since 2008. In November Libya pumped 580,000 barrels of oil a day, which is lower than earlier data. In 2010 it pumped around 1.59 million.

Energy analyst at Citi Futures Perspective in the New York, Tim Evans, said through the first half of next year they will observe the supply-demand surplus.

On the New York Mercantile Exchange the WRI dropped 96 cents in February to $53.77 a barrel and now it has touched the lowest since 2009. It is $53.52 a barrel. So futures were traded 43 percent below 100-day average.

Similarly, Brent dropped by $1.09 in February to $58.36 a barrel on the London-based ICE Futures Europe exchange. Now it has dropped down to $57.88.

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Greece PM calls for early elections

Greece’s stock market dropped by 11.3 percent on Monday forcing the government to call for early elections as investors worry that the main opposition party may win in national level.

The national elections now are to be held on January 25 and as of now the parliament has failed to elect a new president in the country.

It is believed by the investors the left-wing opposition Syriza party may act on the resentment for six years of government austerity. They fear the opposition may also seek to drastically overhaul the international bailout deal.

Not to forget the financial turmoil of Greece in 2010-11 that may have shaken global economy too apart from breaking up the currency union in the wake of eurozone crisis. The present risk is not so great but the bailout creditors such as the International Monetary Fund and some other European countries may be a threat to the government.

It is a known fact that Greece even now is unable to finance itself of its own on bond markets. Its bailout loans are almost at the end. In such situation if a new government seek changes to the deal, credit access would be delayed. Amid all these, the country may face danger of a default and this may hurt the finances of other European countries.

According to Conservative Prime Minister Antonis Samaras, the elections will be held at the soonest possible date as the country has no time to waste now amid coming very near to the final exit from crisis.

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Energy customers hope to benefit from Fair Play for Prepay Campaign
Image Source- http://www.mkweb.co.uk/

Image Source- http://www.mkweb.co.uk/

In September of this year, the Citizens Advice Bureau introduced the ‘Fair Play for Prepay Campaign’, a national campaign that aimed to get energy customers with a prepayment meter a more reasonable deal from their supplier.

The Citizens Advice Bureau believes that these customers are overpaying for a service where they are not appreciated by the supplier. Not only do they pay on average £80 more a year than direct debit customers, but a majority of them have to suffer being cut off throughout the winter.

The biggest grievance the CAB has however, is that the standard of service provided to these customers is well below expectation and that there is a great lack of respect shown by energy suppliers in contrast to the respect they are shown by their customers.

The CAB have made further claims that credit customers do not have such a fractious relationship, by stating that they do not fall victim to the same problems that the former have to deal with. This again highlights why the CAB feels that these customers are being neglected by their provider.

Their goal from the campaign is to see customers with a prepayment meter to be provided a service that is fitting of the money they pay. They are also looking to find more convenient ways for customers to top-up their tariffs, which include greater options to top-up both online and on mobile, as travelling to post offices and shops may not be at the convenience of those paying.

These inconveniences should further support the argument that pay-as-you-go customers should be paying considerably less than direct debit customers as the service seemingly doesn’t represent a value for money.

To heighten the profile of the campaign, the Citizens Advice Bureau have released a new online game titled ‘Prepay Topup!’, which tests the users knowledge of prepay energy rights. The game is now available on the CAB’S website and you can begin by clicking here.

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Property prices showing slow down

Latest data from the Land Registry shows that things are starting to slow down and even the powerhouse of property prices: London has shown prices are still growing – but at a slower pace.

Data shows the average house price in England and Wales is now £177,299 compared to the highest levels ever seen six years ago in November 2007 of £181,324. This is a rise year on year of 7.2%, but that’s a small fall in growth since last month. And not everyone is benefiting from rising prices as 863 were sadly repossessed and lost their homes in July 2014, although this is 33% lower than last year when 1,283 homes were repossessed. Twenty two percent of those repossessed were in the North West, with Yorkshire and Humber the next top spot for repossessions.

Some good news all-round though, although property prices will always go up and down, it’s the volume of sales which affects the economy as people spend a lot of money when moving and around £8,000 in the first two years they move in.  So, good news that actual transactions increased by 7% year on year with numbers heading back towards pre-credit crunch days, with nearly 80,000 properties changing hands.

But not every price bracket sold well in July 2014. We sold 30% less properties priced at under £150,000 and a staggering 37% less homes under £200,000. In fact, it seems only the rich and wealthy in England and Wales seem to be on the move lately. To see sales growth year on year, you need to spending more than £400,000 (up 6% year on year) while sales of properties of £500-£600k are up 20% and those worth one million or more selling 19% more than they did last year!

Regionally, while London still saw growth of 18.4% year on year, in contrast, Yorkshire and Humber saw hardly any growth year on year at all, just 1.4%, this including prices falling by 2.2% in the last month, reversing previous annual gains. Of the 10 regions covered by the report, seven showed monthly falls, although all saw a a rise year on year.

Areas with average property price under the 1% stamp duty include Wales, the North East, North West and Yorkshire and the Humber. Although the highest average is a staggering £460,000 in London, this is a bit of a nonsense figure as it’s an average of the likes of Kensington and Chelsea at over £1.3 million to Barking and Dagenham at £262,000. However one problem in London is the lack of new first time buyers coming through. This, I think is mainly a problem around stamp duty. Most First Time Buyers don’t pay any stamp duty outside of London, but when everyone of the 32 boroughs is seeing their average price go above the £250,000, 3% stamp duty mark, this is a huge tax to have to pay.

Someone buying a property at £249,000 would pay out 1% stamp duty at £2,490, plus other costs, the price of buying is around £5-6,000. Over £250,000 they would have to pay 3% stamp duty, so at £251,000 this would be £7,530 plus other expenditure of £2 to £3,000, so first time buyers would have to find twice the savings – very unfair on hard working Londoners!

For a full analysis of property prices and help buying, selling or investing in a home visit www.propertychecklists.co.uk

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Japanese Economy Backtracks as Tax Hikes Come Into Effect

After recording steady growth under the ‘Abenomics’ policy in recent months, the Japanese economy experienced a large-scale contraction last month that reduced confidence in the country’s economic future.

The economic contraction was the largest on record since the March 2011 tsunami and earthquake, which caused widespread destruction throughout the country. The country’s policymakers face growing pressure to increase stimulus measures.

Japan’s latest sales tax came into effect on April 1st and has reduced spending across the country. Households have been most affected by the new taxes, with lower-than-normal domestic spending measured throughout Japan’s major urban centres.

As the world’s third-largest economy, Japan has experienced reasonable growth in recent months that has largely been reversed by the new taxes. From January of this year until March, Japan experienced average growth of 6.1 per cent.

The impressive growth figures, many economists claim, were the result of a massive spending spree by Japanese consumers eager to purchase soon-to-be-taxed items in advance of the new tax scheme.

From April through June, the Japanese economy shrunk by an annualised 6.8% — an incredibly troubling figure for the nation’s economists. Despite the data, the Bank of Japan believes that the downturn is only temporary in nature.

It has predicted that the Japanese economy is moving towards a moderate recovery, and that stimulus measures do not need to be expanded. Economists believe it may need to revise its projections as more data is released on Japan’s economic status.

Prime Minister Shinzo Abe is currently deciding whether or not to introduce further sales taxes to raise revenue, including a potential tax hike in October of 2015 which would take the 8% sales tax to 10 per cent.

While Japan’s economy continues to contract, the scale of the contraction is below the estimates provided by most economists. Japan’s 1.7% second quarter decline is slightly below the median 1.8% prediction released earlier this year by economists.

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German Investors Less Confident as Russia Imposes Sanctions

Russia-West tensions have caused several key German stocks to plummet as large-scale investors lose confidence in the country’s economy. ZEW – a metric used as an economy indicator – recently fell to its lowest point in 20 months.

The rapid decline in economic confidence throughout Europe has been attributed to new sanctions imposed on many Western European countries in the wake of recent tensions between Russia and European countries such as Germany and Poland.

Economists had predicted that Germany, Europe’s largest economy, would suffer a significant downturn due to new Russian sanctions. However, most failed to predict the scale of the downturn in confidence, particularly the ZEW sentiment indicator.

The ZEW indicator of economic sentiment had previously measured 27.1 points in July. It currently reads just 8.6 points. According to Reuters, economists had placed their estimates for August at 18.2 points – a significantly smaller fall in confidence.

Germany is Russia’s biggest trading partner in the European Union, and the recent sanctions placed on several EU countries are likely to hit Germany the hardest. The economic sanctions were caused by disputes over Russia’s involvement in Ukraine.

As a result of the sanctions, combined with structural economic issues throughout the EU, many economists believe that German economic growth will be significantly weaker than expected in 2014.

The official German second-quarter GDP estimates are due to be released later this week. Investors and economists have speculated that the extent of Germany’s new economic issues could be greater than many commentators have anticipated.

Although the Eurozone grew at an overall rate of 0.2% during the first three months of this year, the second quarter growth rate could measure just 0.1 per cent. A poor second quarter could act as a negative signal for the entire German economy.

Much of Germany’s agricultural output is exported to Russia, making the economic sanctions placed on food particularly damaging to the country’s economy.

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HMRC Tax Recovery Plan Under Fire From MPs

10A new plan allowing HM Revenue and Customs to seize funds from personal bank accounts to recover unpaid taxes has come under fire from MPs. The cross-party Treasury Committee recently announced that it has “considerable concern” about the plan, which was recently proposed by Chancellor George Osborne.

The Treasury Committee, a group of influential MPs, believes that the new powers could reintroduce the discredited and controversial Crown Preference rule – an old regulation that gave HMRC the ability to access personal accounts after companies went bust in order to recover unpaid tax bills.

Without some form of independent oversight, the new power granted to HMRC may lead to fraud and error, according to the Treasury Committee. In a statement, it said that a “lengthy and full consultation” would be required so that the public could be more aware of the powers the plan would give to HMRC.

Chancellor George Osborne has defended the plan, claiming that similar powers are already afforded to the Department for Work and Pensions. According to the MPs, the parallel between HMCR and the DWP’s ability to recover child maintenance is “not exact” – the Department for Work and Pensions, unlike HMRC, is “acting as an intermediary between two individuals” when it recovers funds from a personal account.

The committee claims that fraud could be an issue, and that incorrectly collecting money from accounts could result in issues for taxpayers. In order for any type of legislation allowing HMRC to recover funds from personal accounts to be accepted, the government “must consider safeguards” to protect against errors.

The government has responded to some criticisms of the plan, noting that the long-term economic plan involves reducing the deficit by collecting debts. It highlighted the “minority that chooses not to pay [taxes], despite being able” as a leading issue in reducing the deficit.

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