The S&P/ASX 200 closed 121.7 points higher on Monday at 8,894, a gain of 1.39 per cent and its strongest session in six weeks, after the oil price fell away on news that the United States had paused its strikes on Iran.
ICE Brent crude futures dropped 9.6 per cent to US$87.45 a barrel, following a 4.1 per cent fall on Friday. Brent had traded above US$100 last week for the first time since May.
Energy was the worst-performing sector on the index. Santos and Woodside both fell, along with Karoon Energy, Beach Energy, Yancoal Australia and New Hope. Gold, mining and technology stocks led the market higher.
Pump prices move on a longer clock. Refined fuel is bought weeks before it reaches a service station, so a single session's move in crude does not show up on the forecourt until the cheaper product has worked through the supply chain.
The discount currently holding pump prices below where crude alone would put them expires on Sunday. The 32 cent a litre fuel excise cut ended on 30 June and was replaced by a 16 cent cut for July, which now runs to 2 August.
Asked whether the government would extend it again, Prime Minister Anthony Albanese said: "That's not in our planning at this point in time." He said there would be "some more announcements about fuel in the coming days and weeks".
NRMA spokesman Peter Khoury said prices would rise once the discount ends, and that the fall in crude would take some of the edge off the increase. The NRMA put Sydney's average price for regular unleaded at 171.5 cents a litre last week.
The ACCC said in its fuel price monitoring update for the week to 24 July that average retail petrol and diesel prices had risen in capital cities and most regional locations, which it put down to the change in excise and higher international refined fuel prices.
Monday's fall in crude came from a pause, not a settlement. Iran said the same day that it is not seeking to resume talks with Washington. The excise discount ends on Sunday either way.
