Australian surfer Mick Fanning is set to push ahead of Kelly Slater in the hunt for this year's world title after the top-ranked American was knocked out of the Oakley Pro Bali.

Slater went down to countryman CJ Hobgood in the sudden-death fifth round of competition as the tide began to drop and conditions changed on Wednesday afternoon.

A series of impressive backhand manoeuvres earned Hobgood a 17.00 - well in front of Slater's 14.33.

Fanning capped off the day's events with a late-heat win over Hawaiian Fredrick Patacchia to advance to the quarterfinals, where he'll face French Polynesia's Michel Bourez.

A top five finish is likely to put him ahead of Slater in the championship rankings, five events into the 10-event ATP tour.

Both Slater and Fanning were forced into the repechage round after being outscored by Australians Josh Kerr and Julian Wilson in their respective round four heats.

Kerr's 19.67 earned him a direct quarterfinals berth to battle Hobgood, while Wilson's 14.00 has pitted him against American rookie sensation Nat Young.

Australia's reigning world champion Joel Parkinson also progressed to the quarterfinals after posting a perfect 20 in a tough repechage match-up against Hawaiian John John Florence.

The 20-year-old Florence threaded several impressive barrels to amass a near-perfect 19.20 but was outdone by the current world. No.7.

"The kid can do it all and he was never one I was going to take lightly," Parkinson said of his rival.

"Over the years I've been coming here, there have been odd moments where you get a wave like that but never the kind of frequency we had in that heat."

"That was just magic."

Parkinson will face compatriot Taj Burrow - who directly booked his quarterfinals spot in his round four heat - when competition resumes on Thursday.