Oil prices slumped again
on Monday after OPEC exporters decided against further supply curbs as the
global economy weakens. The cost of diesel dropped more than 8 cents per gallon
from a week ago.
Fears of falling oil
demand due to a slowing global economy and reluctance by the Organization
of the Petroleum Exporting Countries to reduce supply have weighed heavily
on markets since mid-September.
OPEC oil ministers decided
against more export cuts at a meeting in Vienna last week, and some members
such as Kuwait and Iran indicated they were happy with prices below the cartel's
$25 per barrel target. OPEC's reference oil price stood at $20.99 per barrel
on Friday, versus its $22-28 per barrel target range, below which it has an
informal deal to cut production.
Saudi Arabian Oil Minister
Ali al-Naimi said last week that he did not want to rush into further production
cuts when OPEC's one-million barrel per day reduction from Sept. 1 has only
just begun to make itself felt.
The cartel found itself
with little room for maneuver as prices plunged, boxed in by political sensitivities
after the Sept. 11 attacks and deteriorating world economic conditions.
The weekly retail on-highway
diesel prices released by the Energy Department Monday show the national average
cost of diesel fell .083 cents per gallon from last week to $1.390.
The biggest price drop
was in the state of California. Diesel there plummeted .106 cents per gallon
from a week ago to $1.510. Despite the decline, fuel in the state remains
highest in the nation.
Fuel in the Midwest also
plunged more than 10 cents per gallon. Diesel has dropped more than 18 cents
in the region over the past two weeks to $1.41.
The lowest prices in
the nation are found in the Lower Atlantic region. Fuel there fell 6 cents
to $1.31 per gallon.
The remaining regions'
price per gallon is as follows: East Coast, $1.36; New England, $1.46; Central
Atlantic, $1.44; Gulf Coast, $1.43; Rocky Mountain, $1.50; and West Coast,