What a US$100 oil price would mean for ASX shares and petrol prices

MotleyFool04-23

A US$100 oil price would likely boost ASX shares in the energy space and raise Australian petrol prices by about 15 cents per litre, according to experts. As we reported last week, the International ...

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href=https://www.fool.com.au/2024/04/23/what-a-us100-oil-price-would-mean-for-asx-shares-and-petrol-prices/><strong>MotleyFool</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>A US$100 oil price would likely boost ASX shares in the energy space and raise Australian petrol prices by about 15 cents per litre, according to experts. \nAs we reported last week, the International ...</p>\n\n<a href=\"https://www.fool.com.au/2024/04/23/what-a-us100-oil-price-would-mean-for-asx-shares-and-petrol-prices/\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"XKO.AU","symbol_name":"标普/澳交所 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experts. \nAs we reported last week, the International Monetary Fund (IMF) has revised its estimates of the oil price Saudi Arabia needs to balance its budget, given current restrictions on oil production. \nThe IMF now believes Saudi Arabia will need an average Brent crude oil price of US$96.20 per barrel this year if the government keeps its current production limit at 9.3 million barrels per day. \nLast Friday, when Israel launched a strike on Iran, the Brent crude oil price spiked to US$90.66 per barrel and the WTI price went to about US$86 per barrel. \nBoth retreated quickly as it became clear the strike was narrow and possibly only intended to demonstrate that Israel has missiles capable of reaching Iranian territory. \nHigher oil prices mean higher petrol prices \nAMP chief economist Dr Shane Oliver said higher oil prices would mean higher petrol prices. \nHe noted that Australian petrol prices are already around record levels despite oil prices being well below their 2022 highs.\nUsing the WTI price as a guide, Oliver said an increase in the oil price from about $US85 per barrel to around $US100 per barrel would add about 15 cents per litre to average Australian petrol prices.\nThis would have flow-on effects on the economy, potentially dampening efforts to reduce inflation. \nA US$100 WTI oil price would \"push the weekly household petrol bill in Australia to a record $76 up $10 a week from where it was a year ago\", Oliver said. \n\"This would mean more than $500 less a year for the average family available to spend on other things.\"\nThe risks relating to Iran \nAt this stage, Iran has indicated it will not respond to Israel's strike last week. \nThis is a relief to Western nations because Iran becoming involved in the war on an ongoing basis would only destabilise the Middle East further, and possibly disrupt oil supplies. \nOliver explains the repercussions of such an escalation: \n\nThis would threaten Iran's 3% of world oil production and the flow of oil through the Strait of Hormuz (through which roughly 20 million barrels a day or 20% of world oil production flows mainly enroute to Asia). \nAnother sharp spike in oil prices would be a threat to the economic outlook as it could boost inflation again and risk adding to inflation expectations potentially resulting in higher than otherwise interest rates and act as a tax hike on consumers leaving less to spend on other things.\n\nImpact of higher oil prices on ASX oil shares \nOil producers and refiners typically earn more when oil prices go higher. \nHowever, rising oil prices also mean higher input costs for many businesses, especially those in the transport sector, and this can negatively impact their net earnings. \nAs Oliver notes, higher oil prices also lead to higher petrol prices, eating into household budgets and reducing their general spending capacity, which impacts other businesses outside the energy space. \nThe chart below shows Brent Crude oil futures and the Ampol Ltd (ASX: QLD) and Woodside Energy Group Ltd (ASX: WDS) share prices over five years. \nAs you can see, there are some similar patterns between the Ampol share price and the oil price. \nHowever, there are many other factors impacting the Ampol share price and company earnings, so it's not surprising that the two have not moved together in perfect unison. \nOther oil shares like Woodside are only partly affected by oil price movements because oil is just one component of their business. The other big component is gas.  \nBut it's fair to say that higher oil prices are a likely tailwind for the share prices of ASX oil shares.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2429180545"}