OPEC Split as Oil Prices Fall Sharply

Oil prices sank again on Monday, giving consumers more of a break and causing a split among OPEC leaders about what action should be taken, if any, to halt the slide. The price drop has led to a near free fall in gasoline prices in the United States. On Monday, the national average price for regular gasoline was $3.20, 9 cents lower than it was a week ago and 14 cents below the price a year ago, according to the AAA motor club. The price at the pump generally follows oil after a few days, leading energy experts to predict lower prices for the rest of the month at least. “This is not your garden variety autumn price decline,” said Tom Kloza, chief oil analyst at GasBuddy.com, which reports fuel prices from filling stations across the country. “Clearly there is a rift in OPEC, and that means we are more likely to see a price war over the next six months. Crude oil is teetering on the brink of collapse.” Mr. Kloza predicted that the national average for regular gasoline was headed to between $2.95 and $3.10 a gallon. The average household consumes 1,200 gallons of gasoline a year, translating into an annual savings of $120 for every 10-cent drop in the price of gasoline. With the number of rigs working in the United States at or near record levels, some oil executives are beginning to express concern about investment decisions next year. In recent days several members of the Organization of the Petroleum Exporting Countries — Saudi Arabia, Kuwait, Iraq, Iran and the United Arab Emirates — have cut prices to European and Asian buyers as competition for global market share has grown fierce. With the price of the global benchmark, Brent crude oil, falling 1.5 percent on Monday to $88.89 a barrel, many analysts said Saudi Arabia, OPEC’s dominant member, might be rethinking its strategy. “Saudi comments indicate that it may have shifted from a strategy of holding prices at around $100 a barrel to a focus on market share,” said Jeff A. Dietert, head of research at Simmons & Company, an independent investment bank. “That means there is not an immediate floor on oil prices.” He said he thought that Saudi Arabia was trying to slow production growth in the United States...more