15 Sep 2008

Cheaper petrol unlikely despite oil at six-month low

3:23 pm on 15 September 2008

Fuel companies in New Zealand say it is unlikely the price of petrol will fall after United States crude oil dipped to a six-month low.

US oil prices dropped by more than US$2 a barrel of $US98.46 as dealers bet on a swift recovery of energy production after Hurricane Ike.

The New York Mercantile Exchange opened a special Sunday energy trading session because of increased trader interest about the hurricane, which slammed into the US Gulf coast leaving a quarter of US oil and refined fuel production idle.

However, there has been little damage to oil platforms in the Gulf of Mexico.

The losses add to a steady drop since mid-July's peak of more than $US147 a barrel.

However, fuel companies believe is too early to predict whether fuel prices will drop in New Zealand, saying the low value of the New Zealand dollar is extremely unfavourable for purchasing fuel.

BP says it would expect prices to increase. Spokesperson Diana Stretch says this is because many American companies are unable to produce oil because of Hurricane Ike's effects.

Ms Stretch says many refineries are shut down because of the storms, which is causing the price of production to increase.

Chevron New Zealand says it is monitoring the Singapore market where it purchases refined fuel.

Shell says it is surprised prices have not moved in Singapore, while Mobil says it is not yet clear what effect the US crude oil price drop will have on the prices in New Zealand.