Signs point to cheaper petrol as hol­i­days ar­rive

Rotorua Daily Post - - Business - Liam Dann

The odds on cheaper petrol prices for the Christ­mas hol­i­days just got bet­ter as OPEC talks in Vi­enna ended without a deal on oil pro­duc­tion cuts.

Crude oil prices slumped as much as five per cent in ini­tial trad­ing this morn­ing.

The crude oil price surged so much this year it sparked fears about petrol head­ing to­wards $3 a litre. Then it crashed so hard we are now more likely to see it be­low $2 a litre by Christ­mas.

Oil prices peaked in early Oc­to­ber, which co­in­cided with a fall in the kiwi dol­lar and new fuel taxes to hit driv­ers in the pocket.

But in a dra­matic mar­ket shift — which caught many traders off guard — oil prices have slumped in the past two months.

They have fallen as much as one third since a peak on Oc­to­ber 3.

The kiwi dol­lar has also bounced back — up about 7 per cent since the start of Oc­to­ber.

Driv­ers have al­ready en­joyed 12 petrol price cuts since a peak in Oc­to­ber, but there were more to come, says mar­ket an­a­lyst David Lewis of Mil­ford As­set man­age­ment.

“Part of the rea­son that the price got so high was con­cerns about sanc­tions on Iran and a re­duc­tion of sup­ply out of Iran,” he said.

“Then more re­cently we’ve seen Trump en­cour­ag­ing Saudi Ara­bia to con­tinue pro­duc­ing at a higher level to try and keep that oil price down.”

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