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APRIL 08, 2015 | BY Bill Reid
Financial & Housing Market Update (080415)

What has World Oil Prices got to do with our interest rates and house prices and where are they going?
It was inevitable that oil prices would rise slightly since the shock at the end of 2014. Still data from the US Energy Information Administration (EIA) reports crude inventories in the US at near an 80-year high.
“This year, US crude oil inventories are building at an alarming rate of 7m barrels per week, resulting in total commercial stocks of around 434m barrels,” says Greg Bennett, an investment fund manager.
According to the EIA, the total US working storage capacity is 521m barrels. At current rates, US storage capacity could be full within a few weeks.
The recent turmoil is a direct result of the “first price war” among energy producing nations since 1986.
The production of American shale oil is pushing hard to remove the USA from Middle East oil dependency whilst Saudi is happy to let the price fall to try to make shale unprofitable.

The result will take a long time to filter through, but what is clear now, is the biggest oil consumer in the World is almost full to capacity, so the price, although a modest recovery at the pumps, is to stay low for a very long time. Some pundits think 10 years!
Oil being one of the major influences on inflation, which in turn has a huge impact on interest rates, it now seems certain that UK interest rates will remain low for well over a decade, almost half a mortgage life!
You would think buyers would be keen to get on with it.

Historically house prices rise on average by 3% almost immediately after a General Election, so three weeks to go to take off! We hope.
Reid Estates

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