Petrol prices cut again as crude oil tumbles

Petrol prices have been cut another two cents a litre, as Brent crude oil tumbled to fresh lows under US$50 a barrel on world markets.

Petrol prices have now fallen 7 cents a litre in the past month, while diesel is down 10c a litre.

Z Energy trimmed 91 octane to about $2.05 a litre, with premium down to $2.14. Diesel was down to $1.24 a litre.

Falling world fuel prices have been partly offset by a weaker New Zealand dollar.

But the Automobile Association still thinks there is scope for fuel prices to come down another 2c to 3c a litre.

Lower fuel prices and falling mortgage interest rates will provide some welcome relief for some consumers facing a slowing economy and a more uncertain job market.

A big fall in fuel prices lifts households’ buying power and lowers the costs of doing business.

Pump prices were more than $2.20 a litre in October last year and slumped close to $1.70 a litre in January this year before rebounding to $2.22 a litre in the middle of June. That means prices are down about 17c a litre from the recent peak just a couple of months ago.

Z Energy said the latest cut this week was driven by a fall in the price of refined petrol and diesel on the international market.

“The price decrease may well have been larger if not for the New Zealand dollar which has continued to soften against the US dollar,” a Z Energy spokeswoman said.

The New Zealand dollar was trading about US65.4c on Friday, down from more than US67c at the start of July.

READ MORE: NZ dollar could dive further

Z said that pump prices depended on the price of refined petrol and diesel on the international market, rather than crude oil.

Refined product prices are also down more than US$10 a barrel to about US$75 a barrel.

“But if lower crude oil barrel prices continue to flow through into refined prices, and the New Zealand dollar doesn’t continue to slide, then you could expect further cuts. Markets are volatile though, so it’s impossible to tell,” she said.

On international markets, Brent crude fell to fresh lows of just under US$49 a barrel, reflecting a stronger US dollar, the slowing Chinese economy and expectations that Iran would lift production when sanctions are dropped.

Oil prices are down about US$10 a barrel since the start of July.

West Texas crude oil fell another 2 per cent overnight, down to about US$44 a barrel, back to levels seen earlier this year and towards the lows seen after the global financial crisis hit in 2008.

On Thursday US oil was down to the lowest level since March after U.S. government figures showed crude stockpiles remain more than 90 million barrels above the five- year seasonal average. On Friday, WTI rose 0.2 per cent to US$44.76 per barrel after touching $44.20 on Thursday.

Meanwhile, the US oil drilling rig count is down about 60 per cent from its peak in October 2014, setting the stage for production to decline, an oil company newsletter suggested. Offshore rig numbers have fallen by half in the same period. The number of rigs could be below levels needed to maintain oil production at steady levels.

Source: Stuff