Local Gas Prices Might Level Off

The price of gas could continue to slide, but not by much.

The Organization of the Petroleum Exporting Countries (OPEC) announced Wednesday in Algeria it would cut crude oil production by more than 2 million barrels per day.

The cartel, which reportedly produces 40 percent of the world's oil, has seen a five-month decrease in prices. Its goal is to "create a floor" so that prices do not drop too far, said AAA Auto Club South spokeswoman Jessica Brady.

"This is the largest reduction ever," Brady said. "More than likely, the rate (of decrease) will slow a little bit."

It remains to be seen whether the reduction in petroleum will offset the decline in demand and cause prices to level off for the next few months.

OPEC has met four times in four months to stabilize oil prices and the total amount of reductions has equaled more than 4 million barrels per day, according to AAA Auto Club South.

Oil producers in Russia and Azerbaijan are expected to follow OPEC's lead soon.

Brady said if there is any increase in the price of gas during the next few weeks, it will not be significant. There also is a chance pump costs could continue to decline depending on demand.

"There will probably be some upticks somewhere," she said. "There might be increases of 1 to 4 cents at some stations. That could continue, but it will be very minute."

A decrease in demand has been the driving force behind the lower prices. A report from the U.S. Department of Transportation showed Americans drove 100 billion fewer miles between November 2007 and October 2008 compared to the same time period a year earlier.

Crude oil closed Tuesday at $43.60 after closing at $46.28 last Friday.

By comparison, crude oil was at $147 five months earlier.

Any sharp increases in gas prices likely won't come until the end of the first quarter of 2009, when refineries switch from the winter blends to the summer blends, Brady said.

As of Wednesday, the average price for a gallon of regular gas in Florida was $1.703, .006 cents higher than the day before, according to AAA Auto Club South.

The highest recorded average price was July 16, when a gallon was $4.079.