Russia agrees to cut oil production, diesel at two-year low

| Wednesday, November 14, 2001

Russia has offered a token oil production cut to help OPEC shore up falling oil prices. On Monday, an official Russian spokeswoman said local oil firms had agreed to a cut of only 30,000 barrels per day (bpd) in the fourth quarter and early 2002, about a tenth of the amount expected.

The Organization of Petroleum Exporting Countries, which controls two-thirds of world oil exports, is expected to announce this week it will cut output by 1.5 million bpd, its fourth such action this year.

But the cartel has received only faint signs of cooperation from non-OPEC producers to also make reductions or freeze output at current levels. So far, Mexico and Russia have offered minor support, while Norway has said it has no intention of reducing output.

OPEC has been trying to keep the price of crude oil between $22 and $28 a barrel. Last week, the price per barrel was $19.53, the 35th straight day the price had been below the $22 level.

The weekly retail on-highway diesel prices released by the Energy Department Tuesday show the national average cost of diesel is the cheapest it has been since November 1999. Diesel has tumbled 26 cents over the past eight weeks to $1.269.

The biggest price plunge was in the state of California. Diesel there declined 3.7 cents per gallon from last week to $1.391. Despite the drop in price, fuel in the Golden State continues to be the most expensive nationally.

The lowest prices in the nation are once again found in the Lower Atlantic region. Fuel there dipped about 2 cents to $1.20 per gallon.

The remaining regions' price per gallon is as follows: East Coast, $1.254; New England, $1.368; Central Atlantic, $1.343; Midwest, $1.275; Gulf Coast, $1.212; Rocky Mountain, $1.313; and West Coast, $1.363, respectively.

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