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The pain felt at Aussie petrol pumps looks set only to increase as world oil prices surge to record highs, reflecting global gloom at diminishing fuel stocks.
Two of the main indicators of future petrol prices, the New York and London futures markets for crude oil, soared past $US130 in what analysts say spells more bad news for motorists.
Drivers were confronted yesterday with petrol above $1.60 a litre for the first time in a number of captial cities.
In Adelaide, Melbourne, Sydney and Tasmania the highest price yesterday was above $1.62 per litre, while motorists in the Northern Territory have been copping prices in excess of $1.60 for more than a week.
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"There's no reason to expect prices to fall away from these levels anytime soon," NAB economist Gerard Burg said.
NSW motoring body, the NRMA, has warned today could be even worse at the bowser. "Thursday (is) the most expensive day of the week so motorists need to brace for even more pain," a spokesman said.
The only potential for relief is the continued strength of the Australian dollar, which reached its highest level since the currency was floated in December 1983. The dollar reached US96.54 cents at 4.08am (AEST), data from market data provider IRESS shows. The dollar's previous post-float high of US96.53 was reached on March 16, 1984. But if the dollar falls, the price of petrol will climb even further without any movement needed in oil prices.
Record highs
New York's futures contract, light sweet crude oil for July delivery, crossed $US130 a barrel for the first time and hours later raced to a record high of $US133.82. In London, Brent North Sea crude for July delivery settled at a record $US132.70 a barrel after topping $US133 earlier.
This followed a US Government report on unexpected declines in crude and petrol stocks in a market pressured by rising Chinese demand.
Wall Street reacted severely to the news of the oil price surge with the Dow Jones Industrial Average plummeting 226.02 points (1.76 per cent) to 12,602.66 at the market close.
Adding to US jitters was news that the Federal Reserve had slashed 2008 growth forecasts for the economy, while signalling a pause in interest rate cutting. The US Department of Energy's weekly snapshot of energy inventories, which unexpectedly showed declines. The DoE report yesterday showed US crude oil stocks fell in the week ended May 16, by 5.4 million barrels to 320.4 million barrels. Most analysts' had expected a build of 300,000. Petrol inventories dropped by 800,000 barrels, to 209.4 million, confounding expectations of a gain of 250,000 barrels.
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