Since the Sept. 11 attacks, gas prices in much of the nation have been dropping steadily, but all that could change after the Organization of Petroleum Exporting Countries (OPEC) meets next week.
Yesterday, OPEC's biggest exporter, Saudi Arabia, said it is in favor of making a bigger supply cut than previously thought to revive sagging revenues. The announcement caused world gas prices to jump sharply.
Poor OPEC compliance to previous cutbacks and weakening demand have led to a 30 percent price drop since Sept. 10. Saudi Oil Minister Ali al-Naimi said OPEC could easily cut 1.5 million barrels per day (bpd) and hopes that non-OPEC countries would contribute with an additional cut of 500,000 bpd to trim an oil supply overhang that has grown as recession looms over the world economy.
"One million barrels per day is not enough," al-Naimi said. "The number one (million) is a joke."
OPEC, which controls two-thirds of world exports, wants to lift its crude oil basket price back into a $22-28 target range, from $17.67 per barrel on Wednesday, Nov. 7.
A new cut would take OPEC supply limits below the levels of April 1999, when the cartel completed a series of curbs, lifting oil prices from $10 to $35 a barrel.
The cartel is due to meet Nov. 14 to decide how much to cut. The new limit would take effect on Dec. 1.