Oil prices have weakened below $US55 a barrel, further fuelling anticipation of motorists paying less at the pump during the Christmas holidays.
Down about 60% from a $US147 a barrel peak in July, oil struck a 21-month low yesterday as the looming global recession spelled out a slowing demand for energy.
The declining barrel price has prompted repeated falls at the petrol pumps with fuel prices around the $1.60 a litre mark, but if the kiwi was still near $US80c the pump price would be about $1.40 a litre.
Westpac senior economist Doug Steele said that while there were "several wild cards" potentially affecting global oil prices, the per-barrel price was likely to continue trending down for another 12 months as countries around the world shrank into recession.
"The world is slowing down rapidly; with the United States crashing, Europe buckling and Asia softening," Mr Steele said.
"There's plenty of relief at the fuel pumps."
As businesses around the world postponed or cancelled outright own-business investment, the demand for products, such as oil, would continue to decline, Mr Steele predicted.
He noted that when oil prices were above $US140 the strength of the New Zealand dollar at the time offered a 10c-15c "buffer", but the kiwi tended to follow commodity prices down and the full saving of the price decline was not reflected at our pump prices for fuel.
On London's InterContinental Exchange (ICE), Brent North Sea crude for delivery in December plunged to $US54.92 a barrel - a level last seen on January 30, 2007.
Brent later stood at $US55.94, down $US3.14 from Monday, Reuters reported yesterday.
At the same time, on the New York Mercantile Exchange (Nymex), light sweet crude for December tumbled to $US58.32, the lowest level since March 21, 2007.
The contract was later down $US2.91 at $US59.50.
Opec (Organisation of the Petroleum Exporting Countries) president Chakib Khelil indicated over the weekend another round of production cuts might occur should oil prices remain below the cartel's preferred range of $US70- $US90.
Opec, which pumps more than 40% of the world's crude oil, announced in October that its daily output would be cut by 1.5 million barrels a day to 27.3 million barrels a day from November.
