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Fuel prices fall, but OPEC freezes further output
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| Diesel fuel prices fell to their lowest levels since Aug. 28, but the trend of falling prices may not last long.
The Organization of Petroleum Exporting Countries signed a measure this week that will freeze oil production. OPEC predicted that oil prices would soon fall into their target range of $22-28 per barrel and said they were satisfied with the current levels of production. But prices rose in the wake of the announcement and jumped 30 cents per barrel to $34.32 in the U.S.
OPEC said it would not consider any further increases until Jan. 17, the organization's next regular meeting. The group, however, did not rule out an increase in production in the case of an unexpected emergency within the oil market.
OPEC said it wanted to avoid a glut of oil on the open market, which could cause prices to fall below their target market range. Market analysts say an increase in supply likely would do little good in the U.S. market, as refineries already operate at maximum capacity.
Diesel prices in the U.S. fell less than 1 cent per gallon last week, from $1.610 per gallon to $1.603. Still, the new figure represents the lowest average price for diesel in the U.S. since Aug. 28, when diesel cost $1.536 per gallon.
The Gulf Coast region continues to be the cheapest in the country, although the price of fuel rose from $1.548 on Nov. 6 to $1.554 this week. The California region was again the highest, at $1.873 per gallon.
Abroad, fuel protests continued in Great Britain, as truckers demanding lower fuel taxes formed a slow-moving convoy and drove from Yorkshire to London, clogging traffic. Although the government agreed to lower taxes by an amount equivalent to 16.5 cents per gallon in the spring, truckers want to see lower taxes sooner.
The price of crude oil in Great Britain rose 28 cents per gallon this week in response to OPEC's announcement.
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