Diesel Price Falls 1.1 Cents

The national average price of diesel fuel fell by 1.1 cents a gallon last week to stand at $1.509 a gallon on Jan. 15, the lowest point since late August and the sixth price drop in the past seven weeks reported by the Energy Information Administration.

But analysts were divided over the effect last week’s decision by the Organization of Petroleum Exporting Countries to cut oil production by 1.5 million barrels a day may have on future diesel prices. Expectation of OPEC’s announcement had already sent the cost of crude oil up to $30 a barrel on the New York Mercantile Exchange.

The prospect of a supply cut had one analyst predicting a return to rising prices, while another said the market was prepared to maintain distillate prices about where they are now – if not lower.

The Jan. 17 OPEC decision “will keep inventories low and prices up,” Roger Diwan of Petroleum Finance Co., told Bloomberg News.

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