Pump prices have fallen 29 percent from their July record high of $4.114 a gallon and are only 10 cents higher than a year ago. That difference could be bridged this week if gasoline keeps falling at the current rate.
The pullback at the pump comes amid a dramatic turnaround in crude oil prices.
Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said Sunday that members plan to announce a "substantial" output cut at an extraordinary meeting that begins Friday in Vienna.
Analysts say OPEC countries have been alarmed by falling oil prices and want a production cut to prop up members' national budgets that only months ago were bulging with hundreds of billions in petrodollars.
Khelil, who is also Algeria's energy minister, said OPEC may cut output again at a meeting in December, and that the group considers the oil market oversupplied by about 2 million barrels a day.
Light, sweet crude for November delivery rose $2.40 to settle at $74.25 a barrel on the New York Mercantile Exchange. The contract Friday gained $1.53 to settle at $71.38; crude has fallen about 50 percent from its July 11 high of $147.27.
Venezuelan President Hugo Chavez said Sunday he would like prices between $80 and $90 a barrel.
On Monday, trader and analyst Stephen Schork called those comments "oddly conciliatory."
"Unfortunately for Venezuela ... and the rest of OPEC, $80 might not be enough for the bears ... at least in the short run," Schork said in his daily publication, The Schork Report. "After all, the people ... who (initially) denied the existence of the bubble and who have subsequently been telling us since $110 that the floor in oil is in ... are the same people who are now telling us oil cannot last below $80."
Americans radically changed their behavior after gasoline prices spiked above $4 over the summer. And there are signs that emerging economies like China have begun to slow.
Analysts say almost any OPEC action has already been priced in by investors.
"The market is factoring in a big cut. It will likely be as much as 2 million barrels," said Mark Pervan, senior commodity strategist with ANZ Bank in Melbourne. "I think they will go pretty large just to change the sentiment."
Investors largely ignored an OPEC output reduction of about 520,000 barrels a day last month, focusing instead on weakening demand.
Vienna's JBC Energy suggested that - beyond an OPEC cut of at least 1 million barrels a day - a surprise in the form of Russia also reducing output in coordination with the Organization of the Petroleum Exporting Countries - may be in the offing.
"The likelihood of such a move should not be underestimated, as Moscow has recently been seen putting more emphasis on its relationship with OPEC, having sent Vice Premier (Igor) Sechin to attend the last meeting in September," it said in a research note.
In Paris, Nobuo Tanaka, the head of the International Energy Agency, urged OPEC not to cut production so as not to stifle the still-growing economies of countries like China, India and Brazil.
"We think that the current level of prices are still very, very high and the market very tight," he said.
In its monthly report last week, the Paris-based energy watchdog cut its forecast for oil demand this year by 240,000 barrels per day, and slashed its 2009 forecast by 440,000 barrels per day amid the global financial crisis.
Fears that turmoil in global financial markets will spark an economic slowdown in developed countries has helped push prices down.
Last week, news of rising U.S. oil inventories, falling retail sales and slowing housing starts fueled concerns that the world's largest economy may face a major recession that will undermine demand for crude.
"Oil demand in the U.S. will be a bellwether," Pervan said. "If the US, Europe and Japan go into a major recession, there's no reason we can't see $35, $40 a barrel."
In other Nymex trading, heating oil futures rose 7.3 cents to settle at $2.2299 a gallon, while gasoline futures rose 5.4 cents to settle at $1.7201 a gallon. Natural gas futures for December delivery fell 9.5 cents to settle at $7.211 per 1,000 cubic feet.
In London, December Brent crude rose $2.43 to settle at $72.03 a barrel on the ICE Futures exchange.
