With inflationary pressures reducing almost daily in New Zealand, economists are starting to factor in no further hikes to the official cash rate.
It was widely believed there would be a 0.25% rise in the OCR in December this year and one more next year, taking the OCR to a peak of 4%.
United States officials monitoring the recent drop in oil prices believed the dip had benefited the US economy, White House spokesman Josh Earnest said yesterday.
US average petrol prices have fallen below $US2 ($NZ2.60) a gallon in much of the country, boosting US car sales and other areas of the economy in recent months.
In Dunedin yesterday, petrol prices for 91 octane were $1.88 or $1.89 a litre, depending on which service station was used.
The price of US crude crashed below $US50 a barrel yesterday, the lowest price since 2009. Benchmark Brent crude tumbled below $US53 after data showed Russian oil output at post-Soviet era highs and Iraqi oil exports at close to 35-year peaks.
Oil has plunged nearly 55% in value since June when Brent crude traded above $US117 a barrel and US crude above $US107.
Craigs Investment Partners broker Greg Easton said oil prices were playing a major part in the fortunes of global economies and world sharemarkets.
Shell, Chevron and BP were being sold off by investors as the prospects for a price revival looked slim in the short to medium term.
Reports from South America showed the slump in oil prices having a major effect on sharemarkets as the share price of Brazilian oil giant Petrobas fell nearly 11%.
''There's no doubt we have a combination of supplies hitting their peak at a time when demand is weakening.''
The sell-off, which began on concerns of oversupply in high quality US shale crude, accelerated after the November meeting of the Organisation of the Petroleum Exporting Countries (Opec), where Saudi Arabia ruled out production cuts as a means of boosting prices. The kingdom reasoned reducing output would hurt its market share.
Mr Easton said fracking in the US had become a large part of the drive by the world's largest economy to become self sufficient on oil. However, the threat of layoffs from oil-related jobs loomed.
Some companies, outside of those labelled resource companies, were also being sold off because of their dependence on the oil industry, he said.
However, with more money in their pockets, US consumers would start spending.
In New Zealand, the currency was likely to rise against the euro and the Australian dollar but that was also not a major concern as local exporters had already been dealing with a higher currency through hedging and other means, Mr Easton said.
Copper, zinc and lead, aluminium and tin prices were also pulling back, making it difficult for the Australian economy.
''The longer this goes on, the more inevitable it will be for interest rate cuts in Australia. That will put pressure on our dollar.
''There is now a real dampener for inflation and the next issue will be how close we are sailing to deflation.''
Deflation was a decrease in the general price levels of goods and services.
The purchasing power of New Zealand would be improved by a much stronger currency, and it was not all negative, he said.
Input costs, such as machinery to keep the economy rolling, would be cheaper and the costs of getting goods to supermarkets would be cheaper with a stronger dollar and lower oil prices. Exporters
such as Fisher & Paykel Healthcare had demonstrated they could weather a strong currency. Companies such as Mainfreight and Freightways would benefit from lower oil prices.
And Air New Zealand was on a win-win scenario as it bought new aircraft with a stronger dollar and paid less for fuel, the major costs for the airline.
Winners
Companies reliant on fuel as a major part of their input costs: Air New Zealand, Freightways, Mainfreight.
Consumers: Lower prices for major goods, but also food prices could fall as transport costs decline thanks to falling fuel prices.
Gold producers: Gold is a safe haven investment in uncertain times and the price reached $US1200 an ounce yesterday.
Travellers: Overseas travel will be much cheaper, particularly to Australia, if the dollar reaches parity with the Australian currency.
Home owners with mortgages: Interest rates are unlikely to rise this year or next.
Losers
Exporters: Those without hedging or some currency protection.
Resource companies: Companies, particularly listed energy companies and those producing iron ore, tin, zinc and lead.
Investors: People with term deposits are unlikely to see a rise in their returns as interest rates stay low.
Tour operators: The strong New Zealand dollar could keep tourists away from New Zealand.
