Brent crude oil has fallen below $US100 a barrel for the first time since June last year, accompanied by a 15-month low in the Australian petrol price.
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Brent, extracted from the North Sea and a leading global price benchmark for Atlantic basin crude oils, bottomed at $US99.72 on Monday, down 1.5 per cent on the day, before returning to trade above the $US100 level. The price has dropped about 14 per cent from its 2014 peaks in June.
The national average price of petrol, meanwhile, fell for the sixth time in seven months. It dropped by 1.2 cents to 143.2 cents per litre in the week to September 7, the lowest level since June 2, 2013.
ANZ commodities analyst Ankit Pahuja said it was no surprise to see Brent crude falling below the $US100 benchmark. "The downward trend has been obvious since June," he said. "It's not terribly significant...it fell below $US100 in 2012."
But Mr Pahuja said the price was close to the bottom. "We do think the market's a bit oversold and it's probably close to the bottom for the year," he said. "Momentum may take it down a dollar or two in the short term but we do think it's probably close to the bottom."
A mix of supply and demand factors was responsible for the drop, he said. "Poor economic conditions in Europe and China have really played on demand.
"In terms of supply, Atlantic Basin supply is quite high. There's also been a pretty significant build-up of OECD stocks in the first half and third quarter."
Mr Pahuja said oil markets were not being overly influenced by non-economic factors.
"Markets aren't really taking too much notice of geopolitical events in the Ukraine and Iraq."
The major impact on the oil price now was the shoulder season in the United States as the economy transitioned from the holiday driving season to the oil heating demands of winter, he said. "Towards the end of the year we've got a forecast higher than $US100 but in the longer term it will be just below."
CommSec chief economist Craig James said the fall in Brent was clearly reflected in the cheap petrol at the bowser.
"The global economy is tracking along OK without doing anything remarkable in terms of demand for oil. There's softness in China and Europe," he said.
"The world's well supplied with oil and that's putting downward pressure on the benchmark prices and that's being reflected in the petrol pump here in Australia."
Petrol prices were cheaper than a year ago, two years ago and, notably, six years ago. "The average household is saving $17 a month on petrol compared with recent highs for pump prices in July," he said.
Short term, the petrol price could pick up, but long term it should remain subdued, Mr James said.
"The Singapore terminal gate price has edged up about 2 cents and that's potentially the upside that we see in petrol prices.
"Looking further out, though, the Singapore Gas Land prices have fallen again in the last week and remain at relatively low levels.
"While there may be a very short-term lift in terms of prices for motorists, looking a little bit further down the track it doesn't look as though high prices will be sustained.
"The fact that Brent is down should give motorists a degree of hope that these low prices are here to stay."
