Oil prices are down more than 70% from their levels two years ago driven by a combination of a surge in supply relative to demand and a rise in the value of the $US.
- Further weakness down to $US20 / barrel is possible, but we are getting closer to the point where supply slows.
- So far the negative impact on oil producers has predominated but ultimately it will be positive for growth.
- The fall in petrol prices is saving the average Australian household around $14 a week versus two years ago.