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Australia's two biggest primary oil players are Woodside Petroleum and Santos.

Oil is sometimes called black gold but like bullion, its price is on the skids.

Both are victims of a rising US dollar – the corresponding fall in our dollar has crimped some of the petrol price benefits – and the deteriorating outlook for global growth.

The Brent benchmark has slumped below $US100 a barrel. The Singapore or Tapis price, which sets the Australian cost, is higher but has also dropped.

Or to put it in context, the drop in crude has pulled petrol prices down by more than a supermarket shopper docket discount, despite the weaker dollar.

"Petrol is the single biggest purchase for most families," says Craig James, chief economist at CommSec, who tips the national petrol price "will continue to hover around $1.40 a litre. There is always the discounting cycle where prices can vary 15 to 20 cents but if motorists shop wisely savings are to be had."

The boost in spending power will help retailers, he adds.

It's even better for world growth which has been distinctly lacklustre. Or is that why oil is falling in the first place?

For a change, that doesn't seem to be the case. Oil has other problems.

Supply is rising faster than demand. No wonder the price of crude oil has dropped about seven per cent so far this year.

One of the most striking things about the falling oil price is that tension in the Middle East – admittedly a permanent feature of the political landscape – has taken a turn for the worse, and then there's the additional problem of Russia backing rebels in Ukraine.

This must be the first time that crises in the Middle East threatening oil supplies have had no discernible effect.

That's because the once formidable cartel, the Organisation of Petroleum Exporting Countries (OPEC), is losing its clout.

Well aware that supply is outstripping demand – who would have guessed that one day there would be too much oil? – it's trying to cut its members' production quotas, to no avail.

From its point of view they're doing even worse – instead of cutting production, recently Saudi Arabia (by far the biggest OPEC producer), Iraq (second biggest) and Kuwait (number four) unilaterally cut the price.

The reason for OPEC's demise is the shale revolution in the US.

Along with more efficient fuel use, the development of fracking technology to tap shale oil has meant the US is no longer the world's biggest importer of crude, having been displaced by China.

So successful has shale oil been, with production soaring 50 per cent in just three years, that three months ago for the first time in 40 years, the US started exporting crude. It's already producing more oil than either Saudi Arabia or Russia.

OPEC's best customer is becoming its biggest competitor.

"Increases in non-OPEC supply are expected to exceed the moderate growth in world oil demand in 2014 and 2015," the International Monetary Fund says.

The only consolation for OPEC is that the US still imports, if in diminishing amounts. But even then there are forecasts that in a decade or so the US will be self-sufficient, though that will depend on how much its economy grows.

Either way, the US is all but setting oil prices on two counts.

One is the surge in volume producing a glut, though this will eventually self-correct because as a general rule of thumb, fracking requires a minimum price of about $US75 a barrel to be profitable.

Just as critical is an indirect impact. Like other commodities, the price of oil is set in US dollars which is strengthening and so devaluing them.

Oil also faces stiff competition from natural gas which has pulled its share of global energy consumption down from 50 per cent in 1970 to just 30 per cent.

The funny thing is that the slump in oil is also pulling down natural gas prices.

@moneypotts