Ricochet News

Oil near six-year lows, petrol prices to fall by R1 next week

Jan 29, 2015
Oil near six-year lows, petrol prices to fall by R1 next week

Oil remained weak in Asia on Thursday after data showing record US stockpiles sent prices tumbling to the lowest level in nearly six years in the previous session and analysts said a global glut would continue to keep the market under pressure.

The US Energy Information Administration (EIA) said domestic crude oil stocks rose by almost 9 million barrels last week to reach nearly 407 million, the highest level since the government began keeping records in 1982.

"The market expects stockpiles to keep rising, pushing front-month prices further down as refineries enter maintenance season and are likely run at lower utilisation rates," ANZ bank said in a note.

Prices on Thursday stuck close to the previous settlement levels.

Brent was trading at $48.65 a barrel at 0255 GMT while US crude was at $44.54, versus the low of $44.08 hit on Wednesday, the weakest since April 2009. Analysts said the outlook remained weak, especially with demand slowing in China.

Expect a R1 saving on petrol next week

Meanwhile, South African economists expect the price of petrol to drop by about R1 per litre next week. This is on the back of a fall in the Brent crude oil price.

Consumers will continue to benefit from a significant reduction in the petrol price while the rand is expected to remain stable.

Economist Mandla Maleka says: “So our fuel prices are gonna drop in the first week of February, perhaps we may even pocket the drop of a rand or more as well as pondering that the fuel price dropped immensely and the rand remains fairly stable to an appreciation level.”