NEW YORK (AP) -- Energy markets have flipped completely from a year ago, with a gallon of regular gas selling for under a $1 in parts of the country and home-heating prices expected to drop by a third this winter.
With ample crude inventories but reduced demand for gasoline, jet fuel and the distillates that power manufacturing plants, traders have sent the price of oil to $20.18 a barrel, its lowest level since July 1999.
"It's demand worries and a complete lack of faith in the credibility of OPEC," said Tom Kloza, director of the Oil Price Information Service in Lakewood, N.J.
Kloza said members of the Organization of the Petroleum Exporting Countries are not in compliance with existing quotas and that the cartel is widely assumed to be pumping 1 million barrels per day more than the official output target of 23.2 million barrels a day. The 11-member organization produces roughly 40 percent of the world's oil.
"They need to produce what they're supposed to be producing and then cut output by 750,000 barrels a day to restore the supply-demand balance," he said.
In the United States, crude supplies are nearly 10 percent higher than a year ago, according to the Energy Department, and prices for various fuels have fallen dramatically since the beginning of the year.
Consumers should expect big savings this winter, analysts said.
Natural gas, for example, is about one-third cheaper than it was a year ago at $3.25 per 1,000 cubic feet. That's because producers cranked up production during the spring and summer after prices spiked to $10 per 1,000 cubic feet last winter when supplies were low.
Natural gas is the home-heating fuel of choice for roughly 55 percent of U.S. households and consumers can expect to save about 34 percent on their bills compared with last winter, according to the Energy Information Administration.
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