What happened
Westpac IQ economists reported that Brent crude is expected to average US$101 per barrel in the fourth quarter of 2026, with conflict risks potentially driving prices to US$150 in early 2027. Consequently, Australian automotive fuel prices are projected to jump 15% in the December quarter, lifting headline inflation to 4.1% in September and driving a 1.3% quarterly CPI increase.
Why it matters here
A sustained surge in retail fuel prices feeds directly into transportation costs and business input expenses, broader consumer price inflation across the economy. Elevated headline CPI forces the Reserve Bank of Australia to keep monetary policy restrictive for longer, keeping household budgets under strain and dampening corporate operating margins across non-energy sectors.
What to watch
The December quarter CPI data release and global Brent crude spot prices to track whether oil spikes toward the US$150 per barrel risk scenario.
Source
westpaciq.com.au