Oil prices continue to fall even with OPEC deal to cut down supply

Last year oil prices came crashing down due to the oversupply in the market. The Organization of Petroleum Exporting Countries (OPEC) invited the members to focus on reducing the saturation in the market. Leading petroleum exporters such including Saudi Arabia have agreed to cut down the production honoring the OPEC deal. Even the non-members of OPEC such as Russia have agreed to reduce the oil production. Since 2014, inventory surplus of crude oil has not allowed the price to increase. The OPEC deal was announced by November 2016 to trim the global oil stockpiles.

Despite the OPEC deal, the oil prices experience a loss mainly because the US production has increased. This resulted in an increase in the oil inventory all over the USA. As a result, the crude oil missed out on the gains after the OPEC deal. The US crude fell below $50 per barrel for the first time this year. The market is in an indeterminate state now and experts are worried how long this trend could continue.

The oil market was ready for restructuring after the OPEC deal. The oil prices were meant to be maintained at a premium level so that the OPEC revenues could increase. However, the trend shows that WTI prices are moving in the backward direction, as against the OPEC hopes. The options futures market is also bearish which is again not good for the oil prices. The difference between bearish and bullish bets indicate that the market is favoring lowering oil prices. On Wednesday, the Nymex WTI contract showed that the volume of traded options futures reached an oil time high. The investors are want to be protected against the lowering oil prices. This was not what OPEC hoped for when it created a deal to reduce the oil supply.

OPEC’s hope for higher prices is further crushed as the short sellers want to take advantage of the reduced oil prices. New bets are placed on the falling oil prices and this has increased the number of outstanding WTI contracts. Both the WTI and Brent reached a value lower than the 50-day and 100-day price averages respectively. $50 per barrel provides a good support for Brent. Experts suggest that $45 per barrel could be the figure in the future, but the market has to be adjusted to make this a possibility.

There is still hope for the oil prices to increase if the countries stick to the OPEC deal. Analysts predict that oil prices could reach $60 by the end of 2017 if the current cut in production is sustained. The WTI could go down reaching the mid-40s but continuous effort to reduce the supply could enable rebalancing.

Even though the US oil stock piles increased by 8.2 million barrels in the last week, the reduction in oil prices is triggered suddenly as the Saudi Energy Minister commented that OPEC deal won’t be rolled over to the second half of 2017. The energy minister said that the oil producers are not happy that OPEC deal hasn’t resulted in price hikes.

Trump’s $1 trillion infrastructure plan will take time

President Donald Trump’s $1 trillion infrastructure spending plan was generally welcomed by the Democrats. It is one of the pro-growth plans that enabled the stock market to ride high in the past few weeks. His plan is likely to bring about millions of infrastructure jobs, boosting the job market as well. However, all these desirable changes are not going to happen any time soon.

Trump’s infrastructure program started out with numerous meetings with corporate leaders, but there are no firm decisions made on the prospect. Experts believe that the White House is understaffed to take up this massive infrastructure improvement. Trump has to overcome innumerable political hurdles to make this plan a reality. Furthermore, there are not sufficient funds with the government to pay for the huge project.

During the speech to congress, Trump said that the proposal for infrastructure rebuilding plan will commence soon, but no deadlines were given for this program. This means that the program could start only in 2018. The infrastructure spending plan was one of the iconic promises made by Trump during his presidential campaigns. The infrastructure team of the White House is assigned with the task of finding infrastructure projects throughout the country that could boost growth. They must also identify the sources that can be used to fund the program.

Trump has met with Elon Musk, William ford, Richard Trumka and various other officials to discuss the project funding options. Gary Cohn, National Economic Council Director of the White House met with 15 federal departments and agencies to instruct them to contribute to the infrastructure plan.

While the democrats were in favor of infrastructure spending, Trump has to face resistance from his own house. The Republicans are always wary of spending money on anything other than the military. Republicans feel that the new administration has to do a lot of work to get approval from Capitol Hill. The White House administration hopes that the new plan is a methodical process that can gain the support it needs and deserves.

The housing, energy and transportation agencies have participated in many meetings, but there is no deadline defined by the White House. Experts agree that the process could take a long time and the Trump’s team wants to take a comprehensive approach. While the $1 trillion project is exciting, funding the project is a headache that the new White House has to manage. The Republicans are not happy with the increasing federal debts. There is simply not sufficient money with the government to dedicate $1 trillion for infrastructure spending.

Trump has come up with a plan to encourage public-private partnership which will benefit the developers and provide value to the taxpayers’ money. It is unclear whether the entire infrastructure funding will follow the same plan or a different plan would be proposed according to the projects. To complicate the matters further, Trump has proposed that the infrastructure funding plan should be revenue-neutral and it should not add to the existing federal debt. Trump’s team is not interested in hurrying up the project as they want to take their time in making the right decisions.

Consumers unknowingly stung by recurring charges


A recent report has shown how many consumers in the United States are being stung by charges that are being taken from their accounts or cards in the form of recurring charges. Many people do not even realize that the money is being taken out of their account and are then ending up over their limits and are hit by further charges by banks and credit card issuers.

This problem is made worse by the fact that many of those who are having money taken from their account in this way do not keep a close eye on their statements, which means that it a lot of time may pass before they realize that the money is being taken from their account.

Many people have money taken from their accounts and cards in the form of recurring charges due to things such as subscriptions, memberships, and even when they sign up for free trials where they give their financial details when signing up for the trial.

Once the free trial period is over the companies start charging the standard fee for the goods or services and many customers don’t even know that money is being taken until it is too late. Even though most of these companies state that you can cancel within the trial period or at any time, a lot of people tend to forget to do this and therefore end up being charged.

Check statements and subscriptions

Officials are now urging consumers to check their credit card and bank statements carefully each month to see whether any recurring charges are being taken, as they can then tackle the issue before it spirals out of control and before more money is taken.

In addition, consumers should go through and cancel all subscriptions that they no longer need or use, as even though they may not be using them the charges may still be going through because they have not cancelled them.

A survey that was carried out earlier this year showed that these charges were a major cause of concern for many consumers, with 40 percent of those polled stating that they found them to be a big problem. Many even found that there were charges being taken for subscriptions and memberships that they had actually cancelled, was then leaving them seriously out of pocket through no fault of their own.?

Irish households deep in debt with payday lenders and loan sharks

Loan Shark

When examining the global economy, we identify the fact that governments have gone into unprecedented levels of debt since the financial crisis. When we look even closer, we can determine that consumers are more indebted than ever before. No matter what part of the globe you are, there are plenty of households that are suffering from immense levels of debt.

This troublesome debt level is leaving many “vulnerable” to payday loans and loan sharks, says Tom Healy, director of the Nevin Economic Research Institute (NERI).

According to a new report, Irish households are facing huge amounts of debt. To put it into context, Ireland ranked No. 12 out of 24 of Organization for Economic Cooperation and Development (OECD) nations in household debt back in 2001. Today, however, Ireland has reached the third spot, ranking behind Denmark and the Netherlands, and just behind Norway.

Using OECD data, Irish household debt as a percentage of disposable household income exceeded 200 percent in 2014. This is much higher than the Irish government debt to GDP ratio of around 100 percent a year ago. Unfortunately, Irish households are facing substantial risks, Healy referred to it “as dangerous.”

“The trend in household debt since 2001 shows a pre-recession peak of 236% of net personal disposable income in 2007, up from 111% in 2001, which was probably well above the average in the previous decade,” said Healy. “In simple terms, a representative Peadar and Elizabeth Murphy-Smith with a combined debt of ?33,000 in 2001 [and] a combined income of ?30,000… six years later their combined debt had jumped to, say, ?120,000, while their income had risen to say ?50,000.”

Ostensibly, Irish consumers are engrossed in acquiring property because of easy money and low interest rates. As the boom continues and consumers receive higher wages and rising property values, households are overextending themselves. When a member of the household loses their job, experiences a pay cut or becomes ill, a major source of income is lost in the fragile home.

“When the property market collapsed in 2008-2010, along with a sudden stop in inter-bank lending, many households were straddled with huge amounts of personal debt in the form of mortgages which they were not able to service,” he said. The scale of mortgage distress rose sharply as many were forced into restructuring or non-payment.”

If such a collapse were to transpire and interest rates were to rise then many households would be very much vulnerable. Many consumers would be forced to dive into the “shadow world” that consists of websites like Landmark Cash that offer payday loans online and loan sharks with very high interest rates. This is especially true for impoverished households.

Essentially, Irish consumers need to rein in their spending and try to limit their debt intake. If not, then they could be prompted to take out a payday loan and perhaps go deeper into debt.

Although it’s a cautionary report in Ireland, many jurisdictions all over the world are suffering from the same fate. Oil-rich nations and states have experienced thousands of job losses, which then cause households to go into the red, lose their house and even take out payday loans. Regions that were once prosperous are now victims of the collapse in oil prices.

When there’s huge volumes of financially distressed consumers, payday loans become the alternative financial option to turn to.

Big spenders should consider a spending diet

Tired Fat Woman

A recent report highlighted how many people in the United States are spending far more than they can afford to, particularly in cases where they want to portray themselves as having a more luxurious lifestyle than they do have. Many were found to be splashing the cash on luxury items that they did not really need simply to keep up with friends and neighbors, and in some cases they were getting themselves into thousands of dollars of debt in order to fund this type of extravagant lifestyle.

Officials have now said people need to start thinking about their financial health in addition to their physical health. One report suggested that people need to take the same stance as they do when they go on a diet in order to lose weight and improve health. Officials said that many people also needed to consider going on a spending diet so that they could improve their financial health in the same way as they go on a traditional diet to improve their personal health.

Cut costs wherever possible

Experts have said that consumers can trim down on their spending and enjoy enhanced financial health by taking some simple steps. One of the key things that they need to do is reel in expenditure on items that are not necessary or essential. In most cases, this is simply wasted money which many people cannot afford to lose. This can go a long way towards both avoiding and relieving debt problems.

Another thing that consumers should do is make sure that they come up with a strict budget and then stick to it. There is plenty of software and many apps that can be used in order to make household budgeting easier and in order to make this effective it is vital that all outgoings and income is logged in the same way as a normal dieter would log things such as calories consumers and calories burned off by exercise.

While logging outgoings and income, consumers should also take the opportunity to try and trim their spending by cutting out any unnecessary costs. This could be things such as magazine subscriptions or other luxuries that are not essential. Trying to reduce costs on things such as bills will also help to trim and streamline spending for American households, which means that they will benefit from more disposable income, be able to avoid getting into unnecessary debt, and in some cases even be able to put some money aside into savings.