Pump prices up as OPEC cuts oil production

The 14 members of OPEC agreed to cut production by 1.2 million barrels a day (Dan Satherley / Newshub.)
The 14 members of OPEC agreed to cut production by 1.2 million barrels a day (Dan Satherley / Newshub.)

The spike in oil prices has led to higher prices at New Zealand's petrol stations.

The standard price for both petrol and diesel is five cents per litre more than it was a week ago.

Prices rose by 2c for both diesel and petrol on Thursday, followed by a 3c increase on Friday. The standard price for diesel is now just under $1.27 per litre, and just under $1.97 for Unleaded 91.

Crude oil prices rallied 12 percent last week after Organisation of the Petroleum Exporting Countries (OPEC) nations agreed to cut production in a bid to boost prices.

The 14 members of OPEC agreed to cut production by 1.2 million barrels a day, from the current level of around 33.7 million barrels.

West Texas crude finished the week at US$51.68, while Brent crude rose almost 13 percent to US$54.42.

The Automobile Association (AA) says Thursday's price rise was not because of the spike in oil prices due to the OPEC deal. Rather it was because "fuel company margins were already at the bottom of the range". So, an increase "isn't unexpected".

However the AA questioned whether the petrol companies jumped the gun a bit with Friday's increase.  

"Our monitoring of refined commodity prices shows today's increase is premature as the increase in oil prices has not yet been reflected in the imported cost of petrol or diesel."

The AA said that inevitably refined prices would be likely to rise.

On top of that, crude prices continued to rise after Friday's price increase at the pumps. Crude oil prices rose just over 1.6 percent during Friday trading in the United States (Saturday morning NZ time).

Newshub.

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