OPEC decides to cut oil supply, gas prices at 19-month low

Gas prices continue to plunge as demand falls during a slowing global economy.

In Ohio, prices fell about a nickel between Sunday and yesterday.

“People are trying to conserve as much as they can,” said Bevi Powell, director of communications for the American Automobile Association. “They are aware of high gas prices during the summer, and people started to rethink their trips and started focusing on conserving.”

Gas prices have dropped for the past 40 days, Powell said.

The Organization of Petroleum Exporting Countries (OPEC) met Friday in Vienna, Austria, to possibly cut down supply of crude oil.

OPEC decided to stop output by 1.5 million barrels per day, which equals out to only be about two percent of the world’s oil supply, said Ron Stolle, assistant professor of finance.

Despite OPEC’s hopes of increasing gas prices along with the decease in supply of oil, demand is still low for gas. After prices decreased even more over the weekend, OPEC is considering cutting supply even more. They will make the decision at a meeting scheduled for sometime within the next few months.

“It isn’t in the world’s interest to drive (the price of oil) up because the ramifications of higher prices of fuel will drive inflation,” Stolle said. If OPEC decreases supply more, this means the cost of operating will be higher for individuals.

Kelly Macmullin, junior psychology major, drives to Akron five or six times a week for work.

“It’s been so nice having low gas prices,” she said. “It makes it easier to do what you have to do. My whole paycheck isn’t going to gas anymore like it was during the summer.”

In July, crude oil was more than $147 per barrel and gas prices were about $4 a gallon around the country.

Powell said prices were high in part because of the hurricanes in the summer.

“In the Gulf, they shut down production for a few weeks, which affects the supply that is available,” she said. “That makes gas prices go up.”

Now that gas prices may go up again after another OPEC meeting, Stolle said he hopes OPEC won’t cut the supply too drastically.

“That would accelerate the global slowdown,” he said. “It would make all costs higher. Everything is tied together.”

Laura Wrey, junior sports administration major, said she feels good about the current gas prices.

“Before I would fill my tank up $10 at a time,” she said. “Now, I fill it all the way up, and it really is fantastic.”

If prices go back up, Wrey said that it would “really suck.”

GAS PRICES

Average gas prices in Kent:

Yesterday: $2.398

Last week $2.627

Last month: $3.588

Last year: $2.826

Average gas prices in Ohio:

Yesterday: $2.427

At this time last month: $3.688

At this time last year: $2.866

July 3, 2008: $4.05

Average gas prices around the country:

Most expensive: Alaska, $3.73

Cheapest: Kansas, $2.324

Source:

Bevi Powell, director of communications, AAA

Contact student finance reporter Kristina Deckert at [email protected].