OPEC holds output, diesel drops

| 9/28/2001

The Organization of Petroleum Exporting Countries agreed Thursday not to cut crude oil production citing pressure from the United States and uncertainty of how the nation might respond to the Sept. 11 attacks. Meanwhile, the cost of diesel continues to decline throughout the United States.

OPEC agreed during a meeting in Vienna, Austria to leave production unchanged. The cartel has scheduled a November meeting to consider adjusting output, but the cartel could face similar issues then. The Bush administration has discouraged a production cut because of the struggling U.S. economy and uncertainty about whether U.S. retaliation will somehow disrupt oil supplies precludes OPEC from cutting production to prop up oil prices.

Meanwhile, the price of oil continues to fall. During previous price drops, OPEC would have cut production to keep oil prices within a $22 to $28 a barrel price range. Currently, the cartel can only watch prices dip.

"OPEC is caught between a rock and a hard place," Raad Alkadiri, an analyst with Petroleum Finance Co., a consulting firm in Washington, DC, told The Wall Street Journal. "Demand is falling at the same time they have been robbed of the one mechanism they had - to adjust supply."

The biggest drop in diesel fuel prices Thursday from Wednesday was in Kansas where diesel fell more than 4 cents per gallon. Similarly, diesel dropped 3.8 cents in Connecticut, 3 cents in Wisconsin and 2.9 cents in Nebraska, according to Pro Miles Online.

Pro Miles releases Monday through Friday the average retail fuel from more than 4,500 truckstops. Prices are based on fuel credit transactions from each truckstop.