Oil prices have extended their sharp retreat, with West Texas Intermediate crude falling below US$86 a barrel as the market continues to unwind the geopolitical premium built into prices earlier this month.
WTI was around US$85.24 a barrel, down 1.85% on the latest session and more than 11% over the past week.
The decline is significant for Australia because it cuts both ways.
Lower crude prices reduce the earnings tailwind for ASX energy producers, but they also ease pressure on airlines, freight operators and households through lower fuel costs.
The move could also help the inflation outlook after the Reserve Bank lifted the cash rate to 4.85% last week.
For investors, the key question is whether oil stabilises around current levels or continues lower as geopolitical risks fade and markets refocus on underlying supply and demand.
