Gasoline prices tumble despite likely OPEC cuts

NEW YORK — Consumers got another break at the gas pump Monday, as prices dropped further below $3 a gallon and approached year-ago levels even as the near-certainty of an OPEC production cut pushed oil prices marginally higher.

Gasoline has fallen more than a dime a gallon since Friday, hitting a national average of $2.92 on Monday, according to auto club AAA, the Oil Price Information Service and Wright Express.

Pump prices have fallen 29 percent from their July record high of $4.114 a gallon and are only 10 cents higher than a year ago. That difference could be bridged this week if gasoline keeps falling at the current rate.

The pullback at the pump comes amid a dramatic turnaround in crude oil prices.

Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said Sunday that members plan to announce a "substantial" output cut at an extraordinary meeting that begins Friday in Vienna.

Analysts say OPEC countries have been alarmed by falling oil prices and want a production cut to prop up members' national budgets that only months ago were bulging with hundreds of billions in petrodollars.

Khelil, who is also Algeria's energy minister, said OPEC may cut output again at a meeting in December, and that the group considers the oil market oversupplied by about 2 million barrels a day.

Light, sweet crude for November delivery rose $2.40 to settle at $74.25 a barrel on the New York Mercantile Exchange. The contract Friday gained $1.53 to settle at $71.38; crude has fallen about 50 percent from its July 11 high of $147.27.

Venezuelan President Hugo Chavez said Sunday he would like prices between $80 and $90 a barrel.

On Monday, trader and analyst Stephen Schork called those comments "oddly conciliatory."

"Unfortunately for Venezuela ... and the rest of OPEC, $80 might not be enough for the bears ... at least in the short run," Schork said in his daily publication, The Schork Report. "After all, the people ... who (initially) denied the existence of the bubble and who have subsequently been telling us since $110 that the floor in oil is in ... are the same people who are now telling us oil cannot last below $80."

Americans radically changed their behavior after gasoline prices spiked above $4 over the summer. And there are signs that emerging economies like China have begun to slow.

Analysts say almost any OPEC action has already been priced in by investors.