Motorists can look forward to at least six months of super-cheap petrol, with a report from the International Energy Agency the latest forecast to predict crude oil prices are going to stay low for a while yet.
Brent crude plunged to $US30.98 A barrel on Wednesday, the lowest in two weeks, after the Paris-based agency warned the world would remain awash with unwanted oil for most of 2016 due to slow declines in US output and OPEC's reluctance to cut a supply-reduction deal with other oil producers.
Adding to the gloom was a report from the similarly-named US Energy Information Administration, which lowered its oil demand growth forecast for the next two years.
According to the Australian Institute of Petroleum, the national average price of unleaded petrol, 111.6¢ a litre, is at a one-year low.
That translates into average prices in Sydney of 100.7¢ a litre and in Melbourne of 104.2¢ a litre.
Commsec chief economist Craig James said prices would probably remain at this level for the next six months before picking up in the second half of the year.
"These relatively attractive petrol prices at the bowser are going to remain," said Mr James.
"Petrol will stay at this level for the first half of the year before picking up in the second half of the year," he said. "That's a reasonable guess."
"I would think an average for petrol across Australia would be in the region of $1.20-$1.25 in the second half of the year."
The forecast, said Mr James, was based on the Australian dollar dipping mid-year before returning to about US70-72¢ at the end of 2016, coupled with a lift in the oil price to $US35-40 a barrel.
"Over the second half of the year, I think that's where they would be at," he said.
Westpac chief economist Bill Evans said cheap petrol was part of the reason for the lift in Westpac's consumer sentiment index for February.
"While the plunge in the oil price is disturbing from a market perspective, households are now benefiting from lower petrol prices," he said. "Since the survey in January "average pump price" has fallen by 8.5 per cent, providing households with a decent boost to disposable incomes."
In its report, the IEA said the basic supply-demand drivers of oil did not support a big rebound in the price of crude.
"The surplus of supply over demand in the early part of 2016 is even greater than we said in last month's Oil Market Report," said the IEA.
Even on optimistic assumptions that OPEC crude production would flatten out at 32.7 million barrels a day in the first quarter of 2016, there would still be enough excess oil to encourage stockpiling throughout the year, report says.
The IEA estimated there would be 2 million barrels a day of stock build in the first quarter, followed by 1.5 million barrels a day in the second quarter and 300,000 barrels a per day in the second half of the year.
"If these numbers prove to be accurate, and with the market already awash in oil, it is hard to see how oil prices can rise significantly in the short term," the report says.
"In these conditions, the short-term risk to the downside has increased."
Bank of America Merrill Lynch, meanwhile, has released a research paper speculating how oil staying under $US50 until 2020 could reshape the world.
"History suggests sustained low oil prices are actually good for growth," said Merrill Lynch.
"The sharp swing in oil will surely see a large group of winners – China, India, Korea, Japan, Spain, Poland and Holland – and a small concentrated group of losers – Saudi Arabia, Russia, Nigeria, Canada."
