Petrol prices: Oil price surge making Z Energy nervous, demand down ‘substantially’

Supply constraints instigated by Russia and the Middle East have pushed the price of Brent crude oil - the benchmark for petrol prices - to a 10-month high, putting fuel importers on edge.

“I’m sort of nervous that it continues to climb, and it climbs back over that US$100 mark,” Z Energy general manager of retail Andy Baird told Markets with Madison.

Z is the country’s largest fuel retailer, which took over Caltex in 2016. It is now owned by Australia’s listed fuel giant Ampol.

Higher fuel prices were hurting demand “quite substantially” across its 289 stations, Baird said.

Brent hit US$94 a barrel last week and has settled around US$92, but some forecasts, including from Goldman Sachs, see it reaching US$100 in the next 12 months.

Baird had an “open mind” on where the price could go. If he had to put a number on it, he expected and hoped it would settle lower, between US$80 and US$95.

“Now that I’ve said that, I’ll be completely wrong.

“It’s incredibly sensitive to a variety of economic factors globally. Right now that happens to be some cuts in production that have come through from Saudi Arabia and Russia. Tomorrow it may be something else that throws it the other way.”

Watch him discuss how the global oil market influences the price you pay at the pump on today’s episode of Markets with Madison.

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Madison Reidy is the host of New Zealand’s only financial markets show Markets with Madison. She joined the Herald in 2022 after working in investment, and has covered business and economics for television and radio broadcasters.