Crude prices tumbled yesterday and a gallon of gasoline fell below year-ago levels for the first time in 2008, even as OPEC announced a huge production cut in an attempt to halt the declines. The cut in output by the Organization of Petroleum Exporting Countries failed to ease concern that the global economic slump is curbing fuel demand. Typically, a cut in output - meaning less supply - would boost prices. Crude prices have fallen 56 percent from the high of $145 a barrel reached in July, and more than $41 per barrel in just the last month. "At this stage, it looks like we are at the edge of a bottomless pit and prices are heading quickly toward $50," said Nauman Barakat, senior vice president of global energy futures at Macquarie Futures USA Inc. in New York. "OPEC really needed to take the bull by the horns and make a bigger cut." Gathered in Vienna, Austria, yesterday to stanch plunging oil prices, OPEC announced it would slash production by 1.5 million barrels a day. Investors paid little heed, focusing instead on global demand as financial markets spiraled downward in Asia, Europe and then the United States. Light, sweet crude for December delivery fell $3.69 to settle at $64.15 a barrel on the New York Mercantile Exchange. The drop in demand was reflected in a report released yesterday by the U.S. Department of Transportation that showed the largest monthly decline in miles driven by American motorists in 66 years. In August, the month after gas prices peaked at $4.11 per gallon, Americans drove 5.6 percent less, or 15 billion fewer miles, than in August 2007. Americans have drastically altered driving habits, if they are driving at all, amid a severe economic downturn. They have cut discretionary trips, and are carpooling and using public transit more. And the latest weekly report from the U.S. Department of Energy shows that demand for crude has fallen in 38 of the last 42 weeks. That has translated into rapidly declining prices at the pump. Yesterday, for the first time this year, the average retail price of gasoline fell below what it was on the same day in 2007. A gallon of regular gas fell 4 cents overnight to a new national average of $2.78 a gallon, according to auto club AAA, the Oil Price Information Service and Wright Express. That's nearly a dollar less than what was paid last month and 4 cents below gas prices one year ago on Oct. 24. Fred Rozell, retail pricing director at Oil Price Information Service, said pump prices have room to drop 20 to 30 cents more because it usually takes a month for crude oil being traded to be refined into gasoline and shipped to filling stations.

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