The strength of the New Zealand dollar and Tuesday's 4c petrol price hike should form a buffer against further rises; following a spike in global oil prices yesterday.
Brent crude oil jumped more than $US4 to almost $US127 ($NZ152) a barrel on signs of stronger fuel demand and growing concerns over supply disruptions related to Iran.
In tandem with oil prices rising, global stocks also rose as investors zeroed in on encouraging economic data in hopes the equities rally would advance.
The price of a barrel of oil rose $US15 during February and would usually prompt a 15c increase in retail prices, but instead they rose only a total of 5c per litres since February 1, AA PetrolWatch spokesman Mark Stockdale said when contacted yesterday.
"Tuesday's price rise of 4c on petrol and 2c on diesel was more than was necessary. The importer margin for petrol and diesel is now above average," Mr Stockdale said.
The strength of the kiwi against the greenback, trading around US83.5c yesterday, was creating a buffer and helping to offset the rising oil prices, he said.
While the high exchange rate acted as a buffer, Mr Stockdale said the other contributor was that refined commodity prices had not risen as much as crude oil.
However, Mr Stockdale cautioned that expectations are for commodity prices to continue to rise in coming weeks.
In oil markets, Brent crude rose above $US126 a barrel as the data indicating strength in the US economy and Chinese data showing stronger-than-expected factory growth in February, drove expectations of strong demand for oil, Reuters reported from New York yesterday.
The ongoing concerns about disruptions of Iranian oil supplies, already being reduced in the wake of Western sanctions against Teheran for its disputed nuclear programme, added support.
Brent crude rose $US4.10 to $US126.76 a barrel while US oil settled up $US1.77 at $US108.84 per barrel.
The European Central Bank's second massive injection of cash also buoyed sentiment in equity markets, lifting European shares more than 1% and removing the fear of a meltdown in the banking sector that had cast a pall over debt markets.
