Gas Week

EWN Publishing

19 September: Tapis rose $US1.18 a barrel to a record $US83.28 in trading, but with $A up – relative to $US – Australian prices should fall

Posted by gasweek on 26 September, 2007

International crude prices surged following the decision by the US Federal Reserve to cut the Federal funds rate by 50 basis points in a move to stimulate the US economy; but Australian price may fall as the $A rises and the $US falls. According to Nigel Wilson, writing in The Australian (20/9/2007, p. 20), Tapis — the benchmark against which most Australian crude oil exports are set — rose $US1.18 a barrel to a record $US83.38 in trading on 19 September. This compares to a record quote on electronic trading on the New York Mercantile Ex­change for West Texas Inter­mediate of $US82.33, after it reached an after-hours peak of $US82.38 a barrel, the highest since Nymex began quoting oil futures in 1983. Brent crude, which is the benchmark for most of the world’s traded oil, fell 1.28 per cent to $US78.24 after reaching $US78.38 a barrel on London’s ICE futures exchange.

Australian dollar rise impact: The sharp rise in the dollar to US85.47c resulted in motorists and other fuel consumers being cushioned against the impact of the latest crude oil price move­ments. In general terms, a $US1 a barrel increase in the crude price would add around lc to Austral­ian pump prices. But the dollar strength, if maintained, means there could be a reduction in retail prices early next month.

The Australian, 20/9/2007, p. 20


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