Cheap gas is a boon for consumers, but it's a thorn in the side of OPEC, which meets later this week to decide whether to cut production, in an effort to boost pricies. Bobbi Rebell reports.
The hot spot for bargain hunters this holiday season - gas stations. Brent Crude oil futures have fallen by a third since June - recently hitting a 4 year low.. and that's paying off at the pump. But that's a big problem for OPEC - the Organization of Petroleum Exporting Countries. They meet on Thursday- and fund managers are split on whether of not they cut production - to try to jack up prices. Platt's oil editor James Bambino: SOUNDBITE: JAMES BAMBINO, OIL EDITOR, PLATT'S (ENGLISH) SAYING: "I fully expect you know honestly the status quo since 2009 has been that they held production right around 30 million barrels a day. So I would not be all that surprised if they disappointed everyone and kept it there. " Oil prices have been falling since the summer due to high supplies, partly from U.S. shale oil, and also because of low demand growth, particularly in Europe and Asia. Within OPEC, there are different economics at stake - for example Russia needs higher prices to support its economy and wants OPEC to slash production. Saudi Arabia, however, seems to be taking a more casual stance - saying ahead of the meeting that it's not the first time the market has been oversupplied. But it's in their interest to show a united front- as they face rising competition from the U.S. and Canada. Russell Investments' Stephen Wood SOUNDBITE: STEPHEN WOOD, CHIEF MARKET STRATEGIST, RUSSELL INVESTMENTS (ENGLISH) SAYING: "Right now the pressure is downward. Whether or not OPEC is going to arrive at a number, whether they can create a commitment to that number, we will see. But a lot of the dynamics are moving past OPEC production targets. We've got the very significant deceleration in China, which was proven by the cut of rates in China. We've got the deceleration that is taking place in Japan as well as Europe so there is a lot of global demand factors which may be more important than the price OPEC does or doesn't set. " Fund managers say oil prices could plunge to $60 a barrel if OPEC fails to make significant cuts.