Despite the decision by the Organization of Petroleum Exporting Countries (OPEC) to increase oil production levels by 500,000 barrels a day (b/d), diesel fuel prices may continue to rise for some time.
The price per barrel of oil has jumped to more than $34 due to a month-long strike by Venezuela's oil industry, and fears of war with Iraq were compounded by OPEC's plan to cut oil production by 1.7 b/d starting January 1. That helped push the average price at the pump for a gallon of diesel in the United States nine cents between December 16 and 30.
However, experts warn that OPEC's decision to raise production levels may not keep a lid on diesel fuel prices in the near future.
Venezuela, the world's fifth largest oil producing nation, has ceased exporting oil, taking 2.86 million b/d worth of oil off the world market. Iraq, which is embargoed from exporting oil, represents another 2.4 million b/d worth of production that is not available.
The U.S. alone uses over 20 million b/d of oil, experts said, with imports representing 58% of that total.