WELLINGTON: Plunging global oil prices are a boon for New Zealanders this summer, and could stimulate worldwide economic growth this year. The global price of oil has plunged more than 40% during the past five months to trade at about $US53 ($NZ69) a barrel, or less.
For motorists, households and the transport, manufacturing and retailing sectors, it is welcome relief from consistently paying around $2 a liter of fuel in New Zealand, just a few cents off earlier all-time highs. Main centre prices this week have been below $1.90.
While the average petrol consumer won’t lose any sleep over the likelihood of large oil explorers and producers facing hard times, shrinking profit margins and investor returns, the consumer is reliant on them for getting oil out of the ground.
New Zealand Oil & Gas, Anadarko and Schlumberger all have southern exploration intentions, but even the earliest test drilling could be several years away.
Globally, far more advanced oil and gas exploration projects worth more than $US150 billion are likely to be put on hold next year as the plunging oil prices make them uneconomic, data shows, and this could potentially curb supplies by the end of the decade.
Craigs Investment Partners broker Chris Timms said companies such as oil producers BP and Statoil, global oil Services Company Schlumberger and Woodside Petroleum, Santos, Origin Energy and Oil Search would all benefit from a rebound in prices, but many could weather the price storm for some time.
