Singaporeans will not be affected by the current surge in oil prices, said an economist.
CIMB economist Song Seng Wun told The New Paper yesterday: "These prices do not adjust day to day, and nothing will happen for now because we have been at prices above US$50 ($71) before.
"There will be no price change for electricity, petrol or diesel for now.
"The question is whether it can stay above US$50.
"The prices for the consumer do not get adjusted day to day."
Oil prices surged to their highest levels in eight weeks.
Miss Wong Shun Qi, a 27-year-old engineer who owns a car, said that she is not worried about prices going up.
"I don't see the prices of petrol increasing so fast because the effects will not be so immediate. So as of now I'm not too concerned about it," she said
Stock markets across Asia rallied yesterday after major producers the Organisation of Petroleum Exporting Countries (Opec) and Russia struck the first deal in eight years to curb global crude oil production.
Benchmark Brent crude soared to around US$53 a barrel - up about 14 per cent from Tuesday on news of the Vienna deal on Wednesday.
The jump fuelled the largest rally in Asian bourses in recent weeks.
Japan leapt 1.12 per cent, Shanghai added 0.72 per cent, Hong Kong rose 0.39 per cent and Singapore put on 0.81 per cent.
The long slump in oil prices has led to cheaper utilities for consumers.
The latest price rise is unlikely to lead to much cost inflation, as prices will not return to the US$100 levels any time soon, said Mr Song.
Despite the surge in price, it is still not known if Singapore's offshore sector will recover after losing about 15,000 jobs in the past year.
Still, some analysts are cautiously optimistic that oil prices appear to have found a floor and may be less of a drag on the Singapore economy.
DBS economist Irvin Seah told The Straits Times that higher oil prices are a positive for local oil and gas companies that have been struggling for the past few years.
Mr Song said banks are another indirect beneficiary.
Higher oil prices would alleviate deterioration in the balance sheets of oil and gas companies, and help keep banks' non-performing loans to the sector from worsening. But he is waiting to see how it will all play out.
Said Mr Song: "Jobs and investment will follow when there is a sustainable rebound in oil prices. Rigs cost hundreds of millions of dollars.
"No one will invest that kind of money or hire, if they are not convinced that the oil recovery is sustainable."
Singapore Business Federation chief executive Ho Meng Kit warned that even if oil prices were to recover, the local oil and gas sector may not bounce back to pre-slump days.
He said: "Some of the jobs may not come back to Singapore because there is a lot of excess capacity globally.
"Shipyards in China, for instance, can build rigs cheaper than Singapore."
Oil prices have whipsawed since the cut was first proposed in Algiers in late September and investors speculated if a deal could be struck.
But the agreement reached by the Opec and Russia was broader and deeper than expected.
They included hefty cuts by heavyweight Saudi Arabia and Opec's first coordinated action with non-member Russia in 15 years.
But sceptics are already questioning whether all Opec members and Russia will deliver on their individual commitments.
This article was first published on December 2, 2016.
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