Russia refuses production cuts, diesel continues downward trend

| 11/20/2001

Russia announced Monday it would continue to refuse OPEC's demands for making oil supply cuts. The announcement comes as oil prices continue to spiral downward.

London Brent blend fell $1.10 to $16.65 a barrel following last week's OPEC decision not to implement fresh output reductions until Russia made a firm commitment to cut its own production. U.S. light crude fell $1.23 to $16.80.

The Organization of Petroleum Exporting Countries at a meeting last week decided against implementing output curbs of 1.5 million barrels per day (bpd) in January, unless Russia and other non-OPEC suppliers agreed to trim output by a total of 500,000 bpd.

Mexico announced that it would cut oil exports by up to 100,000 bpd and Norway said it might be willing to trim output. But Russia, the world's second biggest exporter, has only offered to cut 30,000 bpd, leaving the cartel well shy of its 500,000 bpd goal for the three nations.

The weekly retail on-highway diesel prices released by the Energy Department Monday show the national average cost of diesel continues to drop. Diesel has plummeted about 28 cents over the past nine weeks to $1.252 - the lowest fuel has been since early November 1999.

The biggest price plunge was in the Rocky Mountain region. Diesel there dropped 2.7 cents per gallon from last week to $1.286. The lowest prices in the nation are found in the Lower Atlantic region. Fuel there dipped 1.5 cents to $1.189 per gallon. The highest prices continue to be found in the state of California. Diesel there pumps for $1.377 per gallon, down about 1.5 from a week ago. The remaining regions' price per gallon is as follows: East Coast, $1.24; New England, $1.356; Central Atlantic, $1.334; Midwest, $1.26; Gulf Coast, $1.192; and West Coast, $1.339, respectively.