Petrol prices on the way back up again

Z Energy has put up petrol prices today. Photo / Dean Purcell

Petrol prices are creeping up as global oil prices rise.

Z Energy and BP today put the price of its Unleaded 91up 3c to a nationwide average of close to $1.88 a litre, before discounting.

During the past two weeks fuel prices across all companies have increased up to four times as oil prices surge on world markets.

BP matched Z's price today after twice putting it up last week.

Over the past fortnight oil posted its biggest weekly gain since March after surging nearly 25 per cent to close to $US49 a barrel.

Z's chief executive Mike Bennetts said his company had responded to the rising international price but he said it appeared to be a "false dawn" and he expected oil prices to settle around the $US40 a barrel.

AA PetrolWatch says wholesale prices have risen nearly 7 cents per litre and company margins were being squeezed below averages of the past few months.

But despite the increase in the imported cost of diesel (about 6c per litre), the margin on diesel remains high and the latest rise puts it up to 48 c per litre compared with an average of 43.5 c per litre over the past year.

International analysts say the oil rally caution is not justified by fundamentals, Reuters reports.

Crude futures have risen almost $US10 a barrel since early August on speculation that Saudi Arabia and other members of the Organisation of the Petroleum Exporting Countries will (OPEC) agree next month to a production freeze deal with non-OPEC producers led by Russia.

Crude oil demand is anaemic, petrol demand has decelerated globally, and China crude oil imports are likely to decelerate.

Morgan Stanley oil analysts

The rally has propelled oil into bull-market territory, after being in a bear market earlier this month.

''We would argue that improved fundamentals are not a key reason for the recent price bounce," analysts at Morgan Stanley said.

"Crude oil demand is anaemic, petrol demand has decelerated globally, and China crude oil imports are likely to decelerate."

Opec will hold an informal meeting in Algeria in September with outside producers led by Russia. Some have speculated about a production - sharing deal, with Saudi Arabia helping stoke much of that perception despite scuttling a similar plan in April.

Others, including Opec member Nigeria, do not think there will be a deal.

Many analysts and traders also argue the current rally will not last. "We feel that this month's approximate $US9 crude advance could easily be followed by an equivalent- sized price decline next month," said Jim Ritterbusch of Chicago-based oil markets consultancy Ritterbusch & Associates.

"The US production factor has taken on a more bearish appearance as the oil rig counts have increased appreciably," Ritterbusch said.