>Despite oil prices falling around 23% over the past two months, we are still paying high prices at the pump. The reason for this is that the Australian dollar has also fallen around 14% against the US dollar during the same period, which has effectively eroded any benefit from lower oil prices.
If the price of petrol is to fall, we need oil to continue its downward trend and the Australian dollar to stabilise or rise against the US dollar, which I believe is likely over the next few months. That said I expect oil will find support around $100 or slightly below before rising up to test the previous high early next year, so if petrol does fall it may only be short lived.
The good news is that many analysts expect crude oil prices to continue to fall due to declining demand in the slowing global economy. So despite the continued dollar decline (due to falling commodity prices), it is likely that fuel prices will fall faster and provide relief to consumers at the pump. If this is not the case, the ACCC should step in to see if gas station owners are back to their old tricks of price gouging to make more profits from struggling consumers.
***************************************************************
Liked this article? Then consider subscribing by clicking here to receive regular updates
***************************************************************
No related posts.
Related posts brought to you by Yet Another Related Posts Plugin.
