Pete Wargent blogspot

Co-founder & CEO of AllenWargent property buyer's agents, offices in Brisbane (Riverside) & Sydney (Martin Place), & CEO of WargentAdvisory (providing subscription analysis, reports & services to institutional clients).

5 x finance/investment author - 'Get a Financial Grip: a simple plan for financial freedom’ (2012) rated Top 10 finance books by Money Magazine & Dymocks.

"Unfortunately so much commentary is self-serving or sensationalist. Pete Wargent shines through with his clear, sober & dispassionate analysis of the housing market, which is so valuable. Pete drills into the facts & unlocks the details that others gloss over in their rush to get a headline. On housing Pete is a must read, must follow - he's one of the finest property analysts in Australia" - Stephen Koukoulas, MD of Market Economics, former Senior Economics Adviser to Prime Minister Gillard.

"Pete is one of Australia's brightest financial minds - a must-follow for articulate, accurate & in-depth analysis." - David Scutt, Business Insider, leading Australian market analyst.

"I've been investing for over 40 years & read nearly every investment book ever written, yet I still learned new concepts in his books. Pete Wargent is one of Australia's finest young financial commentators." - Michael Yardney, Australia's leading property expert, Amazon #1 best-selling author.

"The most knowledgeable person on Aussie real estate markets - Pete's work is great, loads of good data & charts, the most comprehensive analyst I follow in Australia. If you follow Australia, follow Pete Wargent" - Jonathan Tepper, Variant Perception, Global Macroeconomic Research, author of the New York Times bestsellers 'End Game' & 'Code Red'.

"The level of detail in Pete's work is superlative across all of Australia's housing markets" - Grant Williams, co-founder RealVision - where world class experts share their thoughts on economics & finance - author of Things That Make You Go Hmmm, one of the world's most popular & widely-read financial publications.

"Wargent is a bald-faced realty foghorn" - David Llewellyn-Smith, 'MacroBusiness'.

Monday, 15 August 2016

Sydney petrol prices at 11 year low

Fuel prices falling

This seems significant.

The Australian Institute of Petroleum (AIP) has previously reported in its annual data that petrol prices have declined significantly over the past two financial years.

The below chart is for the average unleaded petrol retail price by financial year (cents per litre).

Nationally the average price of unleaded fuel fell from 152.5 cents in financial year 2014 to 123.2 cents in financial year 2016, a decline of more than 19 per cent. 

Commsec reported today that this week the weekly average unleaded petrol price has continued to slide, down 3.2 cents to just 111.2 cents.

The price tends to be higher in Tasmania and the Northern Territory, due to their respective locations. 

Meanwhile, Sydney's average fuel price fell to just 95.7 cents, with the weekly average price at an 11 year low of just 100.5 cents.

Diesel prices have also fallen substantially, down by more than 23 per cent over the last two financial years.

Double-edged sword

Low oil prices are a double-edged sword for Australia.

Lower oil prices are good for consumers but a negative for LNG prices - our exports are produced under long term contracts, which are broadly linked to the price of oil.

This is particularly important given that more than $200 billion has been invested in Australian LNG projects over the past decade, with a massive ramp up in production now to follow over the next five years, which will in turn be a significant boost both real and nominal GDP growth.

Indeed, LNG exports are forecast to triple between 2015 and 2021. 

So weaker oil prices would not be good for income, were they to persist. 

On the other hand, motorists and consumers do benefit from low petrol prices, as petrol is the single largest weekly purchase for most families. 

In fact, over the past year mototists are saving up to $40 per month on average according to Commsec. 

This represents a substantial boost for household budgets.

Furthermore, lower fuel prices will act as a drag on inflation - and not only in Australia, but globally - potentially pulling down the rate of inflation further below the target range (which in turn should keep interest rates lower).