05 May 2021 – Please be aware of scammers falsely representing AMP Capital. AMP Capital is aware of an ongoing scam operation targeting customers and the broader community, offering inflated interest returns available through fictitious investment vehicles titled the Capital Protected Fixed Income Government Fund and the Woolworths Group Fixed Rate Bonds. Through the use of phishing emails, malicious operators are sending falsified e-brochures to people in an effort to entice them to invest in a false product that features AMP Capital’s branding. Please be aware this is a not a legitimate product from AMP Capital.

AMP Capital does not approach potential customers via electronic direct mail (EDM) nor does the company solicit personal or financial information via email. 
If you are concerned that you may have been targeted by scammers, please contact us on 1800 658 404 from 8.30am to 5.30pm Monday to Friday (Sydney time).
More information on scams can also be found on the ACCC’s website Scamwatch.

Economics & Markets

The outlook for oil prices slippery to grasp

By Dr Shane Oliver
Head of Investment Strategy and Economics and Chief Economist, AMP Capital Sydney, Australia

Australian motorists have recently had some relief from higher petrol prices, but we can’t be certain that trend will continue.

In the past month, investors had been fretting that US sanctions on Iran would trigger higher oil prices – and therefore steeper petrol prices at the bowser.

But despite sanctions kicking in, oil prices have actually slumped around 27% from their October highs, depending on which grade of oil you look at and from what country.

That, of course, has been good news for Australian motorists. Petrol prices have plunged from $1.60 a litre on average several weeks ago, to below $1.30 in some cities. They could fall a further as the oil price fall flows through with a lag.

So why have oil prices fallen despite sanctions against Iran having started?

Early warning
The first reason is that the US notified us back in May that the sanctions would start up on Iranian exports on November 5, so there was no surprise. Iranian oil exports have already seen a huge decrease, falling from around 2.4 million barrels per day to 1.4 million barrels per day.


The second reason is that the US has granted waivers to eight countries, so they can keep importing oil and oil-related products from Iran. They include China, Japan, Taiwan, India and South Korea so it’s therefore unlikely that the Iranian supply of oil to the global market will drop much further from where it is at present.

There are a few other factors that contributed to the oil price fall, including rising US inventories, signs that demand growth may be slowing and the fact that investors had overdone buying oil ahead of the sanctions, and have been cutting long positions since. The rising US dollar also doesn’t help oil prices as oil is priced in US dollars.

Spike risk

But despite this relief, there is a risk that the oil price could spike higher at some point if there is a further threat to supply.

The global oil market is now quite tight and spare capacity has fallen dramatically. Iran has been taken out to some degree and there are issues around other countries like Venezuela who have had their oil supply disrupted.

Spending drag

In Australia, there had been some upside to higher oil prices - it was good news for our oil and gas exporters.

But higher oil prices are bad news for Australian motorists because as oil prices go up, petrol prices rise. Prior to the recent falls, we had seen Australian petrol prices reach their highest levels since the global financial crisis, and in some places prices were bouncing above those levels.

If oil prices kept going up, it would have been a drag on consumer spending, with Australians having less money in their pockets to spend at the shops.

Headline inflation would rise (though underlying inflation – which excludes volatile price changes – would stay down and the Reserve Bank would likely keep interest rates on hold).

So hopefully oil prices will remain down and that will be a relief for Australian motorists.

  • Economics & Markets
  • SMSF News
Share this article

Important notes

While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455)  (AMP Capital) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of AMP Capital.


This article is not intended for distribution or use in any jurisdiction where it would be contrary to applicable laws, regulations or directives and does not constitute a recommendation, offer, solicitation or invitation to invest.

Cookies & Tracking on our website.  We use basic cookies to help remember selections you make on the website and to make the site work. We also use non-essential cookies, website tracking as well as analytics - so we can amongst other things, show which of our products and services may be relevant for you, and tailor marketing (if you have agreed to this). More details about our use of cookies and website analytics can be found here
You can turn off cookie collection and/or website tracking by updating your cookies & tracking preferences in your browser settings.