Petrol prices make it into the NZ media (at last)

"Petrol prices and spikes in international crude oil prices has finally hit the New Zealand press (albeit not the print media).

Yeah, we really need an expert to tell us this (sic)!

Petrol prices tipped to hit new record highs

New Zealanders could feel the pinch at the pump if the US ploughs on with sanctions on Iran, a market analyst says.

TVNZ,

2 April, 2012

President Barack Obama vowed on Friday to forge ahead with tough sanctions on Iran, saying there was enough oil in the world market - including emergency stockpiles - to allow countries to cut Iranian imports.

Kevin O'Sullivan from OMFinancial says NZ petrol prices could exceed record highs as a result.

O'Sullivan told TV ONE's Breakfast the global economy can get by without Iran's oil - but only if other major Middle Eastern oil giants play ball.

"As long as everyone else plays the game...Iraq's production is the biggest it's been since 2001, Libya is getting back to post conflict levels, so if everyone else is on, then we can do that," he said.

O'Sullivan said the US might reverse its decision with Iran, which has the fourth largest proven petrol reserves, if Libya and Iraq's production dropped off.

"If you lose Libya and Iraq, then you'll see the sanctions removed pretty quickly," he said.

This week could see oil prices creep up beyond record highs because of the decision, according to O'Sullivan.

"This week, I imagine it will head there as long as oil stays firm, we'll see the impact of these sanctions come through tonight in the prices."

Not all doom and gloom

But there are other factors which could bring the price back down, O'Sullivan said.

"Production is one of the biggest things, so as that ramps up, the price will come down," he said.

"With the economy going so well, that increases the price of oil because everything's rosy - so you get a bit of a slowdown in China or some weak data our of Europe, prices will come off and flow through to us pretty quickly."

He said compared to the rest of the world, New Zealand comes in fourth place with cheap oil prices.

"Australia is a little bit cheaper...the US is obviously very cheap, and Canada. You wouldn't want to be in the UK, diesel is close to $3 a litre and $2.80 for 91 unleaded. So we're not doing too bad", he said.

O'Sullivan predicted the price will get to $2.25 in the coming weeks, then back off.