The average retail price of diesel fuel nationwide increased 3.5 cents to $3.197 a gallon, reaching its highest pump average in more than two years, according to US Department of Energy information.
Diesel’s price was the highest since it averaged $3.288 per gallon October 27, 2008, when it was coming off its historic highs. The fuel had fallen 0.9 cents the previous week to $3.162 per gallon. It was the second of two consecutive decreases that saw diesel fall 2.2 cents from $3.184, another two-year record high. The price is now 42.5 cents more than the same week in 2009.
Prices in the Gulf Coast region rose 5.4 cents to $3.132, while the East Coast gained 4 cents to $3.206. The Midwest climbed 3.1 cents to $3.175. The West Coast increased 2.1 cents to $3.321, and California advanced 2.4 cents to $3.352, the most expensive.
In related news, crude oil production from the Organization of the Petroleum Exporting Countries (OPEC) averaged 29.1 million barrels per day (b/d) in November 2010, a drop of 70,000 b/d from October levels, a just-released Platts survey of OPEC and oil industry officials and analysts showed.
“These numbers are a shocker,” said John Kingston, Platts global director of news. “In the fourth quarter, the world traditionally draws inventories, and the rate of inventory decline is going to be accelerated by this unexpected decline from OPEC. This output decline is not coming as a result of any sign of a decline in demand, so it’s fair to say that Platts’ survey estimates this month is one of the most bullish we’ve reported in a long time.”
Excluding Iraq, which does not participate in OPEC production pacts, the 11 members bound by quotas (OPEC-11) pumped an average 26.7 million b/d in November, 80,000 b/d below October levels but 1.855 million b/d above their 24.845 million b/d target, the survey showed.
Angola, Nigeria, Saudi Arabia, the United Arab Emirates (UAE), and Venezuela saw output decreases totaling 90,000 b/d. This volume was partially offset by a 10,000 b/d increase from Libya.
OPEC ministers will meet December 11 in Quito, Ecuador, which currently holds the presidency of the oil producer group. They are not expected to make any changes to the existing agreement, which has been in place for almost two years.
The latest Platts estimates suggest a compliance level of 55.8% in November with the 4.2 million b/d of cuts agreed in late 2008.