Oil prices have hit an eight-year high and economists are predicting that the average price of petrol at the pump in Australia will soon reach $1.87 a litre.
As Russia's invasion of Ukraine continues, the price of brent crude is still surging.
Overnight it gained another 9.4 per cent, taking the cost of a barrel to almost $US115 ($156).
That is a near eight-year high, and a gain of more than 40 per cent so far this year.
That gain comes after OPEC, which includes Russia, decided to hold production of the commodity at current levels.
"In its post-meeting statement, OPEC+ said that recent oil price increases are not being driven by fundamentals, but rather geopolitics," Capital Economics commodities economist Edward Gardner said.
"Whilst we agree with OPEC+ that a large part of the recent oil price increase is due to a higher risk premium, we also think that the fundamentals have changed.
"In all probability, Russia’s exports will fall, at least in the short term. Foreign buyers of Russian oil have already reported problems accessing the required finance to make their purchases.
"With prices as high as they are now, it is more important than ever that OPEC+ closes its production gap."
The average price at the pump in Australia hit $1.80 last week.
Commsec chief economist Craig James is predicting that will soon rise to $1.87.
"The terminal gate price is around 174 cents per litre," he told ABC News.
Rising oil prices don't just hit people at the bowser.
They also float through to the prices of everyday goods that rely on transport and delivery, with rising energy costs a key factor in current inflationary pressures in Australia.
The price of wheat is also at a 14-year peak, and aluminium hit a record as the Russian attack on Ukraine intensified and Western sanctions disrupted air and sea transport of commodities exported by Russia.
"Meanwhile the Russia Ukraine war rages on, further roiling commodity prices with record moves in coal, oil, gas wheat and aluminium," NAB added.
Global markets rebound in Wednesday trade
The ASX 200 ended up 0.5 per cent at 7,151 points.
The top-performing stocks were Whitehaven Coal (+18.2pc) and Pointsbet (+10.6pc).
The broader rise was after the benchmark defied global markets yesterday to finish higher.
Both European and US markets were buoyant overnight with gains of almost 2 per cent on Wall Street.
Germany's DAX ended up 0.7 per cent, while the United Kingdom's FTSE gained 1.4 per cent.
That is as the war in Ukraine continues to intensify.
NAB said it believed Wall Street was on the upswing, due to comments by US Federal Reserve chair Jerome Powell about the possibility of rate hikes.
"Rate hikes is the medicine the US economy needs to promote a long expansion," it said in a morning note.
"Powell is in favour of a 25bps hike this month but warns a more aggressive approach may be needed if inflation pressures don't abate.
ANZ is betting that a US rates hike will now happen as soon as next month.
"We now expect the FOMC will raise the Funds rate by 25bp in March," it said.
"However, we retain our expectation for 150bp of tightening over 2022 because Powell signalled larger hikes could be warranted later in the year."
The local currency was 0.4 per cent higher, while Bitcoin was near flat after making somewhat of a recovery yesterday.
ABC/wires
