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While consumers routinely see a drop in the price of gas at the pump when the price of a barrel of gas drops (as we have seen in massive swings up and down over the past year) the actual price for a gallon of gas is more effected by OPEC and how they handle their business. When OPEC decides there will be a dip in long-term demand for fuel they hold a big emergency meeting (like they scheduled today to take place next week) and they "speculate" as to if they should slow production, cut exploration spending, etc., etc., etc.
A slowing in consumer purchase of gas at the pump effects the long-term forecasts for OPEC which in-turn effects the amount of oil OPEC decides to produce over a specific time period. This is most commonly related to economic issues (like the one currently taking place).
Recent reports from OPEC suggest cutting production by as much as 1 million barrels a day. How does this effect consumers?...eventually the dip in fuel purchases (or over-supply) is negated and all of the sudden (magically) there is an under-supply. Once again, the cycle continues and long-term energy investors and OPEC see an upswing (growing more confident) and the price of gas goes back up (again...magically). We are not in an age where crude is going to "run-out" of supply (not yet) so until that time...OPEC runs the roost.
Until the current "world" economic crisis is righted we can expect to see this same yo-yo effect of gas prices. The current $3-3.50 a gallon price for gas is something we should be thankful for right now because it will not last given OPEC's "emergency meeting" being held next week. For a governing body that controls 40% of oil production in the world...they set the prices.
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