WASHINGTON -- Today, OPEC ministers gather in Nigeria to consider cutting oil production further, and the U.S. secretary of energy and the executive director of the International Energy Agency (IEA) have asked OPEC to refrain from further production cuts, according the latest This Week in Petroleum, released yesterday by the U.S. Energy Information Administration (EIA).
OPEC considers the price of oil in its decision-making, but also the expected “call on OPEC crude oil,” which is defined as the difference between the global demand for oil and the total supply of non-OPEC oil plus the non-crude oil supply from OPEC (primarily natural gas liquids). In essence, the “call on OPEC crude oil” is the amount of crude oil OPEC would need to produce to balance supply and demand without causing inventories to change, EIA notes.
EIA’s latest forecast for the 2007 world oil supply and demand, released Tuesday in the latest Short-Term Energy Outlook, suggests that the call on OPEC crude oil next year should be close to OPEC producers’ 2006 average production level. With OPEC members’ production currently running about 0.5 million barrels per day below the 2006 annual average rate, EIA predicts the need for an increase in production rather than a decrease during 2007.
The U.S. average retail price for regular gasoline for Monday dropped 0.4 cents to reach $2.293 per gallon. Despite the dip, gasoline prices are 10.8 cents per gallon higher than at this time last year. East Coast prices jumped 1 cent to reach $2.303 per gallon. In the Midwest, prices declined 3.7 cents to reach $2.224 per gallon. Gulf Coast prices rose 1.6 cents to reach $2.198 per gallon. Rocky Mountain prices remained steady $2.248 per gallon. The West Coast had an increase of 1.1 cents to reach $2.496 per gallon, with California prices jumping by 0.8 cent to reach $2.504 per gallon.
Retail diesel fuel prices continued their climb this week, with average nationwide prices advancing 0.3 cent to reach $2.621 per gallon, 18.5 cents more than at this time last year.