Research by brokers Forsyth Barr said Brent crude oil, from the North Sea, was up by 7% on its monthly average for September at $US55. Forsyth Barr broker Damian Foster said the $US55 average followed an upgrade in demand forecasts by both the Organisation of Petroleum Exporting Countries (Opec) and the International Energy Agency. Prices had peaked at $US59 at the end of the month.
``The return of US refinery capacity, rising tensions in the Middle East and improved compliance with Opec output cuts have narrowed the Dubai Brent price spread in September,'' Mr Foster said.
Although forecasts for global demand had risen, locally the New Zealand Transport Agency had reflected ``healthy'' fuel demand, with a 5% growth in heavy traffic for the 12 month period to August, Mr Foster said.
``The positive outlook for freight volumes in the near term provides support for ongoing diesel demand growth in New Zealand,'' he said.
Forsyth Barr continued to have a ``positive'' outlook for the sector, and ``outperform'' ratings on NZ Refining and petrol retailer Z Energy, which also operates the Caltex brand.
He said monitoring by the Ministry of Business, Innovation and Employment showed average gross refining margins during September were $US8.31 per barrel, but with the spike in crude prices the spot gross refining margin had dipped to $US7.30 per barrel.
However, the medium-term outlook for firm margins remained ``positive'', as there was an increase in demand forecasts and supportive prices because of a narrow price spread between the Brent and Dubai-based suppliers.
