The price of oil shot up today by US $25.14 a barrel at one point before closing on US $121.00 a barrel – a rise of about US $16.00 a barrel for the day. This massive rise came about because of fears that the US economy was moving into a recession and the resulting weakness of the US dollar.
The Australian dollar has risen against the US dollar, closing the day at close to 0.84 US dollars as investors abandoned the US dollar. The Australian dollar was close to parity with the US dollar several weeks ago and then fell to around 0.78 US dollars about a week ago before beginning to rise again.
For Australian motorists the price per litre of unleaded petrol has fluctuated between $1.52 and $1.62 over the last couple of weeks, with little advantage gained by the low oil price in the previous few weeks. With the rise in oil today it is unlikely that Australian motorists will see any advantage in the lower price of oil over the past couple of weeks.
It is widely speculated that Australians have been getting a raw deal at the petrol pumps over the last couple of months.