The cost of oil eased back from its New York trading session high of $139.89 to end the session at $138.86. This despite the news that Saudi Arabia has agreed to increase its oil output by 200,000 barrels per day. This takes the increase to 550,000 per day and is the highest output figure from the Saudi’s since August 1981. (more…)

The strike by oil tanker drivers is impacting on Shell petrol stations throughout the country and is likely to have a knock-on effect to other forecourts as Shell garages run out of fuel. Shell say their contingency plans are working well and people are not panic buying. However when people are told not to panic buy, they invariably do and it has to inevitable that fuel stocks start to run low. (more…)

Oil prices ended the week at over $139 a barrel following a two-day rise of over $16. Whilst some analysts are saying the increase is merely due to speculation and prices will soon fall, the majority of commentators do not believe this to be the case. In fact the cost of oil looks likely to pass the $150 a barrel marker over the next month and could go all the way to $200 a barrel over the coming months.

The news has sparked concerns that although the economy is slowing, increasing inflationary pressures on oil, fuel and food look set to drive interest rates higher. Whilst the UK kept rates on hold, the European Central Bank has given a strong hint that it will push up rates. All in all it is not a good time for the economy and the consumer.

Abbey National has taken the decision to reverse two of the mortgage rate cuts it introduced only two weeks ago. Its new fixed rate deals will show an increase of 0.15% and 0.59% from the end of May. Even then these new deals may not be around for very long as such offers are only made available for a very short period of time, sometimes just a few days. (more…)

The Bank of England’s Monetary Policy Committee (MPC) has kept interest rates on hold at 5%. The decision was expected by many commentators  as the MPC do not have the same aggresive approach as the US Fed. Also the threat of rising inflation, particularly on fuel and food, is every present.

However the economy is continuing to slow, with the housing sector bearing the brunt. Consequently interest rates are expected to be cut in June by 0.25% with further cuts coming over the next 12 months to take rates down to 4.25%. Good news for those with tracker mortgages, but the question whether these reductions will be passed on to fixed rate customers still remains.

Argun Murti, an analyst at Goldman Sachs, has predicted that crude oil could top the $200 a barrel marker in as little as six months. The news came as US light crude rose above $122 for the first time yesterday. Murti does have a track record in correctly predicting oil price movements as 3 years ago he was the first to suggest oil would head above $100 a barrel.

Whilst it is the global demand, notably from China and India, that is drving prices higher, the man in the street will be more concerned about the impact on domestic fuel and petrol prices which continue to rise.  With around 67p of the price of a litre of petrol going to the Government in tax it is within their powers to alleviate some of the pressure.

Halifax, the UK’s largest mortgage lender, has reported that house prices witnessed an annual fall of 0.9% in April, taking the average value of a house down to £189,027. The bank added that it expects a ‘mid-single-digit’ percentage decrease in 2008. However the decline will not be the same across the UK, with some areas being worst affected.  Wales and the West Midlands are likely to be the most badly affected whilst Scotland is expected to buck the trend and actually see an increase. (more…)