At the urging of OPEC,
Russia agreed last week to cut oil production to help shore up slowing oil
demand. The announcement comes as oil prices continue to plunge.
Russia, the world's second
largest crude oil exporter, ended a showdown with the Organization of Petroleum
Exporting Countries that threatened to unleash a price war. After the decision
in Russia to cut production by 150,000 barrels per day (bpd), attention shifted
to Norway, the world's third largest exporter of oil. OPEC has asked Norway
for similar cuts.
OPEC agreed last month
to curb output by 1.5 million bpd in January, if non-OPEC producers, such
as Mexico, Norway and Russia, agreed to trim output by a total of 500,000
bpd. Mexico has since announced that it would cut oil exports by up to 100,000
bpd and Norway has offered to cut production by between 100,000 and 200,000
bpd. Other independent exporters, such as Oman and Angola, also have agreed
to lower output. The proposed cuts put OPEC near its 500,000-bpd goal.
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 decreased 36 cents since the
Sept. 11 attacks to $1.173 per gallon.
The biggest price drop
from last week was in California where fuel fell 5.3 cents per gallon to $1.247.
The cost for a gallon of diesel in the state has plummeted 44 cents since
mid September. The lowest prices in the nation are found in the Gulf Coast
region. Fuel there dipped 1.3 cents to $1.129 per gallon. The highest prices
are in the Central Atlantic region. Diesel there dropped 1.6 cents per gallon
to $1.27. The cost of diesel declined about 2.6 cents per gallon in the New
England region. Despite the reduction, the region claims the highest prices
nationally. The remaining regions' price per gallon is as follows: East Coast,
$1.186; New England, $1.314; Lower Atlantic, $1.139; Midwest, $1.174; Rocky
Mountain, $1.169; and West Coast, $1.214, respectively.