Petrol prices at the pump are elevated across the country, driven by surging oil prices. World oil prices are edging closer to breaking the US$100 a barrel mark. In the past week, the West Texas Intermediate price for oil on the futures exchange has risen to $95.82 a barrel – the highest price since September of 2014. It is currently trading near this elevated level.
The Organisation of Petroleum Exporting Countries (OPEC) made record cuts to production last year and pledged to unwind these this year. However, so far OPEC have under-delivered. Non OPEC producers are set to lift supply and some large economies like China are expected to release strategic reserves this year, while reserves have already been tapped in the United States. The International Energy Agency (IEA) predicts global supply could reach 6.4 million barrels per day this year if the remaining OPEC+ cuts are fully unwound. This would help address supply-demand imbalances and take some of the heat out of oil prices.
However, fears of an imminent Russian invasion of Ukraine remain heightened, fuelling concerns that oil supply will be disrupted. Russia is one of the world’s largest oil producers. The conflict could mean the supply response will be slow, leaving oil prices higher for longer.
BT Investment Solutions (BTIS)
BTIS delivers an institutional grade investment management capability across a range of solutions, from low-cost index portfolios to actively managed strategies.
This document has been created by Westpac Financial Services Limited (ABN 20 000 241 127, AFSL 233716). It provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information has been prepared without taking account of your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. Projections given above are predicative in character. Whilst every effort has been taken to ensure that the assumptions on which the projections are based are reasonable, the projections may be based on incorrect assumptions or may not consider known or unknown risks and uncertainties. The results ultimately achieved may differ materially from these projections. This document may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, Westpac Financial Services Limited does not accept any responsibility for the accuracy or completeness of or endorses any such material. Except where contrary to law, Westpac Financial Services Limited intends by this notice to exclude liability for this material. Information current as at 10 December 2021. © Westpac Financial Services Limited 2021.