Chapter 1: What recent trends have we seen in Brent crude prices?
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Welcome to Fuelcast. I'm Carrington Clark, and this is your source to stay on top of the numbers behind the ongoing energy crisis. It's Friday, May the 1st. We're recording mid-morning. Let's have a look at the latest figures. The price of Brent crude has now fallen to $110 a barrel since we last checked in on Wednesday.
The national average price of unleaded has risen by $0.01 to $1.88 per litre. And the national average price of diesel has also risen by $0.01 to $2.61 per litre.
Chapter 2: How is Donald Trump's military briefing affecting fuel prices?
Today, I'm joined by Alan Kohler to dig into today's major energy headlines. Good morning, Alan. Good morning, Carrington. Alan, it actually feels like an age since we last spoke, but it's only two days, but so much has happened since that time. We did see this extraordinary spike in the price of Brent crude. It hit $126 a barrel, the highest level in
in years, and that seemed to be because of Donald Trump receiving new plans, new military plans that people saw as a sign that perhaps we would see a reactivation of live conflict between the US and Iran. We have now seen it come down again to about $110 US a barrel. What's your analysis and read of the situation?
That was a scoop in Axios that the military commanders in the US had given Donald Trump a briefing on plans they've got that they reckon could bring Iran back to the negotiating table because, of course, Iran's not negotiating at the moment because they say, we're not going to negotiate while there's a blockade on. So Trump's got to decide whether he either drops the blockade
or goes after him again with bombs to try to change their mind.
Chapter 3: What impact do supermarket giants face from rising costs?
So, you know, who knows what he'll do? I don't know. But for the moment there's nothing, there's no negotiations and therefore the Strait of Hormuz remains closed and looks like remaining closed for the time being.
One of the interesting potential deadlines might be Donald Trump's trip to China, which is coming up in two weeks. Obviously, China, a huge customer for Iranian oil, oil from the Persian Gulf. And so obviously they want the Strait of Hormuz open. Do you think that puts pressure on Donald Trump to try to get this sorted before he goes to China?
Well, I guess so.
Chapter 4: How are Australian inflation rates influencing consumer prices?
But really, I mean, what's he going to do? Say, oh, look, we're going to stop. We're going to not worry about the thing and we're going to just stop blockading Iran now because China wants us to. He's not going to do that. So, you know, I don't know. It seems, look, he's absolutely stuck, none of it about it. I mean, I can't see an easy way out for them.
Yeah. And this brinkmanship, this Donald Trump suggesting earlier in the week that Iran would start seeing its pipes explode because they couldn't deal with the buildup of pressure because they couldn't get their oil anywhere. We've heard those from some experts suggesting that actually that's a bit of a furphy, that you can wind down production at particular wells.
Chapter 5: What are the implications of increased plastic and transportation costs?
And Iran obviously has the capacity to do that, they say. And so that three-day threat or deadline that Donald Trump seemed to impose seemed to go nowhere.
Yeah, but all the experts I was reading about after that were laughing at him, saying it's crazy.
Let's turn to the domestic economy, Alan. We have had some fascinating updates from the two big supermarket giants, Woolies and Coles, and they're kind of echoing each other, aren't they? I found this fascinating. It came in the same week that we received the inflation data showing Australian inflation is running at the highest level since September 2023.
What's fascinating about this information from Coles and Woolies is that this is almost real-time information, isn't it?
Chapter 6: How does the distinction between headline and trimmed mean inflation affect our understanding?
They're saying they're speaking to suppliers Suppliers are asking for price increases because they're facing higher cost pressures. They say we're going to feel the pinch first when it comes to the fresh items, you know, your bread, your veggies, your fruit, your milk, but that it will flow through. Also updates from ANZ. Qantas is changing its capacity.
It's a pretty gloomy picture, isn't it, that's being painted by these big Australian companies?
Yeah, look, and there's a couple of things about this. Firstly, I spoke to the CEO of one of the big food manufacturers this week, and he was saying that the cost of the cap on the peanut butter jars, the plastic cap, has gone up 40%. So, and that's just not the, that's not just the peanut butter, that's the plastic, right?
So plastic, because of the closure of the Stratoformers, plastic costs have gone up a lot. And that obviously flows through to everything, really, because most stuff is packed in plastics. And also the cost of diesel is flowing through to the cost of transporting all the food and and other products to the stores, the supermarket stores. So that's coming through.
And that's starting to make me wonder about the usefulness of the distinction we draw in the inflation data between headline and trimmed mean. The headline inflation rate, which everyone quotes on the other Wednesday, we learned that it went to 4.6% in March. So obviously that went up a lot, but then the trimmed mean was 3.3%. Now, the trimmed mean is where they take...
the biggest 15% of price rises and the biggest 15% of price declines out of the inflation rate and take the middle 70% as being kind of the core inflation. The trouble is that
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Chapter 7: What is the future outlook for fuel prices and the economy?
I mean, is that useful anymore? I mean, it's coming through to everything now. It isn't just the big price rises in fuel that are driving up the headline rate, but kind of everything now is starting to rise. So, look, I just think that, yeah, it's beginning to flow through to everything.
We're seeing that obviously through jet fuel and airfares and all the supermarket prices that Woolies and Coles are talking about. I just think that what Trump and Benjamin Netanyahu did on February the 28th is turning into a global disaster, no doubt about it.
Yeah. Alan, thank you for joining us for this episode of Fuelcast. And you've got an episode of That's Business coming up. Who will you be chatting with?
Talking to Craig Scroggie, who is the CEO of Next DC, which is building data centres. They have been for 15 years, but they're now just getting so many new orders for these data centres because of AI. So it was a good discussion, really interesting discussion about AI and what's going on and Craig Scroggie building data centres like crazy. And what does it mean for us?
What does it mean for electricity demand and water and all this stuff?
Yeah, it should be fascinating. I'll listen in. Thank you so much for joining us. We'll be back in your feeds with all things fuel on Monday.
Thanks, Carrington.
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