Mexico cuts oil production, diesel prices up

| 1/3/2002

Mexico reaffirmed on New Year's Day it would join OPEC's effort to bolster lackluster world oil prices by cutting its own exports by 100,000 barrels per day (bpd) in the first six months of 2002. The cut would take effect immediately in concert with OPEC'stightening of supplies by 1.5 million bpd.

Mexico's energy ministry said in a released statement it was confident that cuts in output by OPEC and non-OPEC producers "will achieve a healthy balance between supply and demand," which will halt falling prices.

Along with Mexico's cut, pledges from Norway, Russia, Oman and Angola brought the tally of independent exporters' contribution to about 462,000 bpd. OPEC had pressured the non-cartel members to chip in with 500,000 bpd in reductions in addition to the cartel's own 1.5 million bpd cut.

As oil producing nations continue to negotiate cuts in production to combat falling prices, the weekly retail on-highway diesel prices released by the Energy Department Monday show the national average cost of diesel rose 1.5 cents per gallon from last week to $1.169.

The biggest price increase from a week ago was in California. Diesel there climbed 3 cents per gallon to $1.305 - the most expensive nationally. The lowest average prices are found in the Rocky Mountain region. Fuel there flows for $1.12 per gallon, about 2 cents less than the previous week. The New England region was the only area to see a drop in average prices. Diesel there dipped about 1 cent from last week to $1.29 per gallon. The remaining regions' price per gallon is as follows: East Coast, $1.192; Central Atlantic, $1.274; Lower Atlantic, $1.149; Midwest, $1.148; Gulf Coast, $1.135; and West Coast, $1.259, respectively.