International Oil Prices On The Rise

15 January 2001

Concern that OPEC may cut oil production coupled with cold snaps in the Northern Hemisphere is putting pressure on fuel prices in New Zealand.

In the past fortnight, the cost of a barrel of crude oil has risen by $NZ5 to $NZ50 in anticipation that OPEC will reduce the amount of oil it produces in an attempt to raise prices.

OPEC meets in Vienna this Wednesday to discuss production cuts. Speculation that the cuts may be steep has pushed crude prices to their highest levels for a month.

At the same time, product prices (refined petrol and diesel) have also jumped significantly. Since late December, refined petrol prices have risen by $NZ10 and refined diesel prices by $NZ7.

Pushing up international diesel prices has been a series of recent cold snaps in Europe and North America. Diesel oil is commonly used for heating in the Northern Hemisphere.

BP’s Managing Director Peter Griffiths said recent world price hikes are making it very difficult for fuel retailers.

“Unfortunately, it seems that the recent spate of price drops will be short-lived. At least New Zealand motorists enjoyed cheaper prices over the summer holidays.”

Mr Griffiths said he could not predict what would happen to prices in the short term, but that a lot depends on the outcome of OPEC’s meeting on Wednesday.

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