September 10, 2008

BIRMINGHAM, Ala. - OPEC, the intergovernmental organization made up of 13 oil producing nations, announced Wednesday a plan to curb oil production by 500,000 barrel a day.  The move will cut into the world's oil supply and curb a multi-month drop in Alabama gasoline and diesel fuel prices, according to Bob Robicheaux, UAB Professor of Business and chairman of the Marketing and Industrial Development Department.

The AAA auto club reported a nearly 40 cent drop in Alabama fuel prices from July through the first week of September.  The prices reflected the falling cost for U.S. crude oil, down to $103 a barrel Wednesday after a record high of $147 earlier this summer.

"It is clear from this announcement that while we were criticizing oil prices in this country, OPEC still does not want prices to drop any further," Robicheaux said.

As oil prices stabilize so to will pump prices which could mean a slowing or complete end to the current trend toward lower prices for gasoline and diesel.

"OPEC sees Americans are willing pay $3.50 a gallon for gas. So it wants to limit oil production, because limited production will cause the price to stay at that level," Robicheaux said.