Global oil prices remain above last week's record $US140 ($NZ184), raising the likelihood of more increases in store for New Zealanders at the petrol pumps - with 95 octane above $2 a litre for the past eight weeks.
Oil has risen more than $US1 a barrel over the past two days, to more than $US141, having hit a record $US143 last week.
The price of crude at about $US120 a barrel in early May tipped the balance and pushed New Zealand's pump prices beyond $2 a litre for the first time - a level they have hovered above since then.
With crude prices tipped by an Opec spokesman to head towards $US170 in the months ahead, combined with a weakening New Zealand dollar against its US counterpart, there is an increased likelihood of New Zealand fuel reaching $NZ2.50 a litre.
Global spot prices at midday yesterday were about $US139 for West Texas light crude and $US141.27 for North Sea Brent, ABN Amro Craigs broker Peter McIntyre said.
"The weakness of the greenback is a major factor in the [barrel] price because a lot of the oil contracts are paid for using the US dollar," Mr McIntyre said.
Reuters yesterday reported oil was back above $US141 a barrel, having been bolstered by the weak US dollar and continuing tensions between Israel and Iran over the Iranian nuclear programme, tensions which helped oil hit its record near $143 last week.
Oil prices have jumped more than 45% this year, extending a six-year rally, as supply struggles to keep pace with rising demand from emerging economies, such as China and India.
Additional support has come from a flood of cash from new investors buying up commodities to hedge against inflation and the weak US dollar, Reuters said.
Mr McIntyre said while some analysts, and Opec member countries, had blamed speculators for as much as 10% of the recent increased prices, some analysts were now rejecting the speculator effect, believing the oil price would be higher without speculation.
"They [analysts] are saying it is a supply and demand issue," Mr McIntyre said.
Senior commodities analyst at the Australian & New Zealand (ANZ) Bank in Melbourne, Mark Pervan, told Reuters that oil was now "a very jittery and news-sensitive market that is running on rumours and concerns of future supply disruptions".
"The US dollar is down and there are many high-level geopolitical news items, particularly in the Middle East, that are pushing prices up," Mr Pervan said.
