Diesel, oil prices dip

| Monday, December 20, 2004

The national average price-per-gallon for diesel fuel fell Monday, Dec. 20, from last week’s average of $1.997 to $1.984, the Department of Energy reported.

It is the second week in a row that the national average price of diesel has been below $2 a gallon. Until last week, the price of diesel had been above the $2 mark since late September.

The highest average prices in the nation continue to be found in the New England region, where the average cost is $2.199.

Among the higher average prices were in California, at $2.087; the West Coast region, at $2.047; the East Coast region, at $2.052; and the Central Atlantic region, at $2.171.

Other prices included the Lower Atlantic and Rocky Mountain regions, at $1.988; the Midwest region, at $1.944; and the Gulf Coast region, at $1.922.

Meanwhile, crude oil prices fell below $46 a barrel Monday, Dec. 20, as traders assessed a cold snap in the United States that helped drive prices sharply higher last week.

Light, sweet crude for delivery in January dropped 64 cents to $45.64 per barrel in afternoon trade on the New York Mercantile Exchange.

Oil prices had surged 5 percent Friday to reach their highest level this month as colder weather spread across the Northeast, triggering fears of higher heating oil usage.

While oil is still about $10 a barrel cheaper than the all-time closing price of $55.17 recorded twice in late October, the downward momentum stalled a week ago partly because of concerns about the nation’s tight supply of heating oil.

The U.S. supply of distillate fuel, which includes heating oil, diesel and jet fuel, remains low compared with year-ago levels, and the Energy Department has warned homeowners that they would have to pay over 30 percent more for heating bills this winter compared with 2003.

In Cairo, Egypt, earlier this month, OPEC agreed to reduce output to target production levels. The group has been exceeding by more than 1 million barrels a day the official ceiling of 27 million barrels a day.

The cutback is scheduled to take effect the first of the year.

“Cooler weather has compounded the impact of their pledged cutbacks, reversing the recent slide in oil prices,” Energy Intelligence, which reports on the industry, said in a recent commentary on its Web site.

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