Australian household budgets are set for another hit after Saudi Arabia’s new energy minister confirmed he would limit the kingdom’s oil production amid uncertainty in the global energy markets.
Oil prices rose about 2 per cent today, following the announcement by Prince Abdulaziz bin Salman, son of Saudi King Salman and a long-time member of the Saudi delegation to the Organisation of the Petroleum Exporting Countries.
Rising costs of crude typically result in higher prices at the pump, with the effect usually felt by consumers six weeks after the initial oil hike.
Australian transports costs have already been on the rise this year, according to the Australian Automobile Association’s (AAA) June 2019 Transport Affordability Index.
Typical Aussie households were spending between $530 and $574 a year more on transport than they were a year previously, double the rate of inflation in the last financial year.
Sydney was the most expensive city for transport in Australia, with Melbourne second.
Typical capital city households now spend almost 15 per cent of their total income on transport, researchers found.
“Australians are feeling cost of living pressures across the board and rising transport costs are adding to the pressure on their household budgets,” said AAA managing director Michael Bradley.
“The cumulative effect of continued rises in transport costs is a heavy burden at a time when Australians are feeling cost-of-living pressures on many fronts.”
Executives at the annual Asia Pacific Petroleum Conference said today they expect oil prices this year to be pressured by uncertainties surrounding the global economy, the US-China trade war and increasing US supplies.
Prince Abdulaziz told the conference the pillars of Saudi Arabia’s policy would not change and a previously agreed global deal to cut oil production by 1.2 million barrels per day would survive.
Brent crude futures gained $US1.05, or 1.7 per cent, to settle at $US62.59 a barrel, while US West Texas Intermediate crude futures rose $US1.33, or 2.4 per cent, to settle at $US57.85 a barrel.
He added that the so-called OPEC alliance between OPEC and non-member countries including Russia was staying for the long term.
Russia’s oil output in August exceeded its quota under the OPEC agreements.
Elsewhere, China’s crude oil imports gained about 3.0 per cent in August from a month earlier, customs data showed on Sunday, buoyed by a recovery in refining margins despite a persistent surplus of oil products and tepid demand.
The United States is “very concerned” about China’s purchases of Iranian oil, Dan Brouillette, deputy secretary of the US Department of Energy, said.
The United States last year withdrew from a nuclear deal that world powers had done with Iran in 2015, and reimposed sanctions to strangle Iran’s vital oil trade.
US President Donald Trump said on Monday (local time) he could meet with Iranian President Hassan Rouhani and that he had no problem with such an encounter.
Extracted from 9news