Iran and Venezuela, both members of the Organisation of the Petroleum Exporting Countries (Opec) agreed at an informal meeting in Algeria last week on modest oil output cuts in the first such deal since 2008.
Oil prices have risen 13% in the past six trading sessions in the US.
How much oil each country will produce is to be decided at the next formal Opec meeting in November, when an invitation to join cuts could also be extended to non-Opec countries such as Russia.
Forsyth Barr broker Damian Foster said the price of oil spiked towards the end of September as Opec reached an agreement in principle to cut oil production to between 32.5million and 33million barrels per day (bpd) at the November meeting.
Current Opec production was 35.1million bpd.
However, the market was still sceptical about whether the cartel could implement the target.
Many thought the agreement was already falling apart as Iraq said the ceiling was not good for Baghdad which wanted to increase production to 5million bpd from 4.6million bpd.
The oil price rally stopped just shy of $US50 ($NZ69.80) a barrel, increasing from $US46 a barrel before the announcement.
While prices rose $4 a barrel during the month due to the spike, the average price of oil was flat during the month at $US47.20 a barrel.
Currency movement had a negative impact in New Zealand dollar terms with the average price of crude dropping 1% in September to $64.60 a barrel, he said.
Forsyth Barr’s estimate of New Zealand Refining’s September 2016 gross refining margin was $US6.90 a barrel, a 46% increase on August.
"This is a solid improvement and well above our second-half 2016 estimate of $6.30 a barrel. Although the financial year-to-date numbers remain weak compared to last year, one must keep in mind the 2015 financial year was a record high result."
The sharp lift in the September margin was driven by a solid increase in the price of refined products, Mr Foster said.
New Zealand Oil & Gas (NZO) generated good cash flow from its Kupe assets and had a healthy cash balance, meaning it was not heavily exposed to fluctuating oil prices.
Also, the Kupe upside was good as it had three reserves upgrades since October 2015.
As an exploration and production company, exploration success was critical for the company, he said.
Without success, cash flows from producing assets were spent for no return.
In the current low oil price environment, NZO was seeking to acquire cheap assets instead of exploring for resources.
The importance of the oil price was muted by the dominance of Kupe in NZO’s portfolio but it remained a key driver for exploration opportunities and still had a modest impact on key earnings.
Z Energy’s acquisition of Chevron New Zealand provided it with significant opportunity to deliver further material earnings growth, Mr Foster said.
Fuel margins were the key driver of value and had moved upwards from unsustainable low levels during the past five years.
"We do not expect margins to increase materially from current levels."
Z refined about 75% of its product at NZ Refining which generally provided a competitive advantage over imported product.
When refining margins were low, importing product was typically cheaper.
