POPULAR WORDS

A 3.3 million barrel reserve of distillate built up in the United States (US) due to slower economic growth and a milder winter has helped force down oil prices. Distillate prices in Asia have fallen 3% this week, below the crucial US$1 a gallon (refiner price, before government taxes). This is critical to the pricing of diesel in Australia. The price of crude oil has fallen 22% from its peak in September and 17% in the last week - in US$ terms. In Australian dollars, the fall in the last week is more than 20%. Oil prices hit US$29 in the US, but held at US$29.50 on Asian markets where stocks have not built up as quickly. In Australian dollars, the oil price is now below $54. If it holds for a month, then the top-level fuel surcharges applied when oil surged to above $68 will have to come off. If the trend continues and rationality hits fuel pricing, the 9 to 15 cent/litre premium that diesel has commanded over petrol prices should subside over the next month.