OPEC holds off on lowering target price, diesel continues drop

| 10/23/2001

OPEC members moved swiftly over the weekend to dispel notions that they were lowering their $22-$28 oil price target, although they appear to be in no rush to slash output for the fourth time this year. As OPEC continues to hold off on lowering its oil price, the cost of diesel fell 3.5 cents per gallon from a week ago.

The Organization of Petroleum Exporting Countries' basket price fell to a two-year low of $18.54 a barrel last week, staying for the 19th straight day under the $22 a barrel lower end of OPEC price target band. The market has made a 20 percent fall since the Sept. 11 attacks on the United States, which worsened a sickly global economy already taking its toll on fuel demand.

Cartel member Iran acted quickly to stress that OPEC will continue to aim for $22-28. "I don't think we need to change the band," Iranian Oil minister Bijan Zanganeh told news reporters Sunday. "Most of the OPEC members believe that it is a good range and we don't want to change."

OPEC ministers are scheduled to meet Nov. 14 to review market conditions and production policy following their recent decision to leave output at 23.2 million bpd for the time being.

The weekly retail on-highway diesel prices released by the Energy Department Monday show the national average cost of diesel has plummeted more than 21 cents over the past five weeks to $1.318 - the cheapest fuel has been nationally since January 2000.

The biggest price drop was in the Midwest region. Diesel there dipped about 4.5 cents per gallon from last week to $1.329.

The lowest prices in the nation are found in the Lower Atlantic region. Fuel there dropped 3 cents to $1.239 per gallon.

The highest prices nationally continue to be found in the state of California. Diesel there is $1.453 per gallon - down .032 cents from a week ago.

The remaining regions' price per gallon is as follows: East Coast, $1.289; New England, $1.42; Central Atlantic, $1.377; Gulf Coast, $1.255; Rocky Mountain, $1.408; and West Coast, $1.417, respectively.