What Will It Mean For Gas Prices?

Crude oil prices have fallen sharply, dropping below $65 a barrel today despite OPEC's decision to cut production quotas.

Weakening global demand for crude amid the world's financial woes has softened the impact of OPEC's announcement that it's cutting production by 1.5 million barrels a day, starting next month.

Light, sweet crude for December delivery fell $3.44 to $64.40 a barrel in electronic trading in Europe.

The size of the OPEC cut reflected concerns within the cartel that the bottom appears to be falling out of the market. OPEC accounts for 40 percent of global oil supply. Crude is selling for 50 percent less than this year's historic highs because the worldwide economic crisis has put a huge crimp in demand.

So what will happen to gas prices?

As we all know, oil prices and supply affect prices at the pumps. But remember, even when oil prices are stable, we see fluctuations in gas prices.

According to the Energy Information Administration, retail gasoline prices tend to gradually rise before and during the summer, when people drive more, and fall in the winter.

The administration also states gasoline prices can change rapidly due to crude oil supply disruptions stemming from world events, or domestic problems such as refinery or pipeline outages.

(Copyright 2008 by WITN and The Associated Press. All Rights Reserved.)


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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by FARROW Location: COASTAL on Oct 24, 2008 at 01:10 PM
    If we would stop talking, start building and producing our own oil off our coast like Alaska, Palin, hello! Tell OPEC WHERE TO GO, Take control of OPEC, and we start to control their production of oil. How's that sound to you. Then we would see more stable pricing, and lower prices at the pump.
  • by American Biker Location: Eastern NC on Oct 24, 2008 at 12:33 PM
    This is just the reason the United States needs to start drilling for their own oil, and taking care of their own. Quit relying on other countries, and also quit helping them. It's time for America's politicians to start looking out for our own people that are hurting.
  • by Red State Location: Washington Co. on Oct 24, 2008 at 11:22 AM
    It appears so far that the plan has backfired. Oil prices continued to fall today due to speculation of reduced future demand. So take that Ahmadinejad and Chavez! My question is where is Congress rewarding the speculators who are driving down the prices like this? Oh riiiiiiiiiight! LOL
  • by Doug Location: Hubert on Oct 24, 2008 at 11:06 AM
    Just so this is in perspective, OPEC crude output is around 30 million barrels/day and they account for less than 1/2 of world production. Taking out 1.5M barrels/day is significant, but not huge. Add to that the fact that many OPEC countries "cheat" on the quotas, and it's just about a non-issue with the worldwide economic slow down. I just hope we see gasoline and food prices dropping soon, so cash strapped Americans can get to work, feed their families and still have enough to pay off the mounting national debt!
  • by ??? Location: NC on Oct 24, 2008 at 09:48 AM
    The tumbleturd beetles known as Demobrats will say its Bush's fault again knowing it is a lie.(For those who dont know what a Tumbleturd Beetle is, it is a bug that gets a piece of animal dung and rolls it around and around until it is nice and round).
  • by 4wheeldrive Location: chocowinity,nc on Oct 24, 2008 at 07:29 AM
    so what that means is if there cutting their output, this means supply goes down and gas prices go back up? whats wrong with this picture? its all about them making billions and killing us hard workers. no wonder the economy is hurting.
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