Industry Update: Oil Prices, Job Cuts, and Housing Trends

Oil Prices Plunge

In good news for movers oil prices fell as tensions continue to boil in the Middle East following Israel’s retaliatory strike against military targets in the Islamic Republic of Iran over the weekend.

Brent crude reported a fall of more than 5 percent following the strike by Israel which did not impact Iran’s oil and gas facilities providing stability for the global energy market.

Stephen Innes of SPI Asset Management has said that oil prices could continue to plunge if tensions no longer reach fever pitch:

If tensions cool further or peace talks unexpectedly gain traction, we could see oil slide down to $60 per barrel as traders shift focus back to the looming 2025 supply glut - especially if China's economic stimulus underwhelms,

As Christmas approaches moving companies will have certainty that prices at the pump will fall making journeys cheaper.

While shares in oil companies like BP and Shell have fallen an inverse reaction has been felt by airline companies such as EasyJet who have reported an increasing share price.

Volkswagen Cuts Jobs in Germany

The Germany carmaker Volkswagen plans to shut at least three factories, lay off thousands of workers and cut existing workers’ pay by 10pc in a further sign of economic woes in Europe’s industrial powerhouse.

The cuts come amid worsening prospects for the country as Chinese electric vehicles (EVs) provide more competition for traditional combustion engine cars. The energy-intensive industry is also facing headaches from lower gas imports from Russia following the war in Ukraine.

The company employs more than 120,000 in Germany with half of those located in Wolfsburg. The car industry employs over 1 million Germans accounting for 8pc of the total workforce and 16pc of exports.

In September, “The People’s Car” announced it was closing a factory in Germany for the first time in its history along with announced restricting plans including abolishing a 30-year-old employment protection measure to save 10b.

Bulk Purchases of Homes Increase

The number of people buying apartments in Ireland has dropped despite a massive uptick in supply as investment funds and other bodies ‘bulk purchase’ properties.

According to the Irish Department of Finance in 2017 819 sales of apartments to ordinary buyers were transacted with 546 to institutional investors, however, these figures rose in 2020 to 438 and over 1,717 respectively.

The report notes that 2019 saw the beginning of interest rate cuts by the ECB with funds looking for higher-yielding assets and turning to property as their choice.

The report notes that apartment sales remain highly concentrated around Dublin, where planning rules mean the bulk of new homes near transport links, including in central locations, must be apartments.

Dublin has in recent years become an attractive option for tech workers with over 70,000 people employed in the sector taking up 40pc of office space with many residing in apartments.