Australian dollar oil hits new high

Egyptian worries, an oil price that’s enjoying a technical breakout and a weak Aussie sent the local oil price to new highs on Friday. Here’s oil:

Not a new high thankfully, and if we see more Chinese growth worries this week, then surely this rally is going to run into trouble. But it’s a race between that and the falling AUD for the same reason:

Friday saw a brief spike down through 90 cents.

Meanwhile, the local oil price keeps climbing, though the pain is yet to be fully felt at the pump. There is a 4-6 week lag between oil and petrol prices so the latest big move of 15% or so is yet to hit the servo. Here is a chart showing the correlation:

Share

About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.