Crash in crude could result in lower prices at the fuel pump

Queensland fuel prices could fall even further, after the North American crude oil price fell into negative territory for the first time in history, according to RACQ.

The price of West Texas Intermediate (WTI) plummeted to -$37.6 US a barrel this morning (Tuesday 21 April), but have subsequently returned to positive territory. 

RACQ spokesperson Renee Smith said while Australia prices off Brent, the WTI price would impact world oil prices and in turn what we were charged here.

“The Brent price has already fallen overnight by nine percent to $25.6 US a barrel as a result of the WTI price drop. While this is a big fall, Brent isn’t yet as low as it was a few weeks ago when it hit and 18 year low of $22.7 US a barrel,” Ms Smith said.

“Singapore and Australian prices follow the trend set by Brent. So, in the coming weeks if we see this fall in the Brent price continue, it will flow onto Queensland Terminal Gate Prices, and then result in prices further dropping at Queensland servos.” 

Ms Smith said the WTI price was unprecedented, and in the 120 years of the current oil-based global economy a benchmark price had never gone into negative.

“This huge fall follows fears North American oil storages are reaching full capacity,” Ms Smith said. 

“With very limited options for storing the oil and very little oil being used, supply contracts have become a liability. This means the potential cost of storing the oil is greater than the value of the oil, and traders were being forced to pay others to take it off their hands.”