Oil prices ease, but diesel still high

| 8/19/2005

Oil prices dropped dramatically in trading on the New York Mercantile Exchange on Thursday, Aug. 18, falling within range of $62 a barrel after having set records near $67 a barrel the previous week.

Prices for light, sweet crude oil rose to $63.56 in afternoon trading after dipping to $62.80 in the morning.

Meanwhile, diesel prices still remained high in many parts of the nation. According to ProMiles, California diesel prices averaged $3.037 per gallon Thursday, down slightly from Wednesday, Aug. 17. However, CaliforniaGasPrices.com reported as much as $3.44 per gallon at one station in Mammoth Lakes , CA .

By contrast, the national average price on Aug. 18 was $2.61 per gallon.

In some areas, diesel fuel actually cost less than regular gasoline. In Missouri , for example, the price of a gallon of regular gas on Aug. 18 averaged $2.501 per gallon, while diesel average $2.487 per gallon, according to AAA.

The possible good news is that wholesale gas prices dropped sharply Thursday, falling as much as 20-cents in some areas. That means lower prices at the pumps shouldn’t be too far behind.

In related news, the Organization of Petroleum Exporting Companies has increased its forecast for world oil demand in 2006 by 30,000 barrels per day.

Reuters reported the new forecast states that demand in 2006 is expected to grow by 1.57 million barrels per day. In addition, OPEC said it would likely have to increase output to offset lower-than-expected output from non-OPEC nations.