This morning on my way to work gasoline at the corner station was 5 cents a gallon cheaper than it had been a few days ago, a pleasant surprise being shared by millions of American motorists.
Lower prices at the pump reflect a phenomenon that would have been considered chimerical not long ago -- a worldwide softening of oil prices, with no end clearly in sight.
Press reports trumpet that an alarmed and shaken OPEC cartel is almost in chaos, with 12 members putting enormous pressure on the 13th -- Saudi Arabia -- to lower its huge oil output and eliminate the global glut.
Only if the Saudis drop production from their present 8 million barrels a day (m.b.d.) to 6 million, the argument runs, will the world's oil surplus disappear , allowing the Organization of Petroleum Exporting Countries (OPEC) to keep its fraying price structure relatively intact.
OPEC production last year fell to its lowest point since 1969, according to a report in the Petroleum Intelligence Weekly (PIW). And cartel members are planning a emergency session for Feb. 27 to try to coordinate cuts in production.
''All by themselves,'' says the well-known oil analyst John Lichtblau, ''the Saudis can make or break the market.''
So far the desert princes, sheikhs, and technocrats appear to be holding firm against OPEC's pressure. The Saudi government declares that current output remains at 8.5 m.b.d., a bit above the estimate of most experts.
Yet the Saudis, says Mr. Lichtblau, ''have every conceivable reason to preserve OPEC prices and prevent the cartel from breaking up.''
It may be, in other words, too early for people in rich and poor oil-importing lands around the world -- their economies ravaged by soaring oil prices over the past nine years -- to gloat about what is going on.
''Among experts,'' says Marshall Thomas, markets and prices editor of the PIW , ''there are very strong differences of opinion about future oil prices.''
Many traders involved in the daily marketing of oil - where the price drops are most spectacular -- say they believe that prices will crack under the current pressure. ''But,'' says Mr. Thomas, ''a majority of analysts who take a longer view believe OPEC will cut production enough to preserve the pricing structure.''
A distinction is drawn in the present situation between contract prices, which remain relatively firm, and spot prices, where the downward spiral is most evident.
More than 90 percent of OPEC oil is sold by member nations under long-term contracts, with prices pegged to the official cartel level -- currently $34 a barrel for light Arabian crude.
''Arabian light'' is a type of Persian Gulf petroleum used as a benchmark, or standard, for price-setting throughout the industry. Other crudes are priced higher or lower, depending on the amount of sulfur in the oil, distance from markets, and other factors.
So far among OPEC members only Iran -- once a price hawk but now strapped for cash -- has broken the official contract price, by offering its oil at $32 a barrel, $2 below the Gulf standard.
2 Even so, Iran fails to sell more crude, partly because tankers sailing up the Gulf to load Iranian oil risk attack by Iraqi gunners, but mostly because the world market is saturated with all the oil that customers will take.
''It is not really a matter of price, but a matter of demand,'' said a marketing expert.
Indirectly, according to Lichtblau, Libya, Algeria, and Nigeria break the official OPEC price by having some of their crude oil processed in Europe and then selling the refined gasoline, heating oil, and fuel oil at prices so low that they undercut the cartel standard.
By and large, however, real price-cutting is not at the contract level, but in the spot market, where 5 to 10 percent of the world's oil is sold to the highest bidder.
In early January of this year, says Marshall Thomas, spot crude prices for Arabian light were holding steady at $34 a barrel. In mid-January the price began to tumble. Now, he says, ''cargoes for March delivery are selling at $29. 25 to $29.50 a barrel.''
This abrupt drop means that spot prices -- which at one time had climbed to $ 40 a barrel -- are at their lowest point since the spring of 1979. Spot prices for refined products like gasoline and heating oil are about the same as spot crude prices, meaning that many refiners are losing money.
The spot market is small, Thomas concedes, ''but it gives the signal that people do not want to buy. So the sellers come down.''
All along the marketing chain people are cutting prices to sell oil in a world where demand runs at least 2 m.b.d. below available supplies.
''The world,'' says Lichtblau, ''only needs 20 m.b.d. of OPEC oil'' -- a third below the cartel's earlier maximum production of 31 million barrels daily.
Some oil companies that once courted OPEC nations now try to back out of long-term contracts, or at least renegotiate to take less crude, because they lose money when they pay the official OPEC price.
The four American firms making up the Arabian American Oil Company say they cannot take all of Saudi Arabia's offered crude at $34 a barrel, when spot prices are so much lower.
Adding to OPEC's problem is the fact that last year noncartel nations -- principally Britain in the North Sea, Mexico, and Oman -- raised their production by 500,000 barrels a day.
''For the future,'' Thomas says, ''producers have two choices -either follow the market down in price or wait for the Saudis to do it alone, by cutting production.''
The dramatic drop in world demand, experts agree, stems from conservation -- the adjustment by millions of people in many lands to expensive oil -- and from the stagnation of industrial economies throughout the world. Economic recovery in the US and Europe would erase some of the oversupply of oil by boosting industrial demand for fuel.
The question arises: Would sharply lower oil prices -- say, gasoline at $1 a gallon in the US -- be an unmitigated blessing? Many consumers would answer ''yes,'' but economists have some doubts.
''In the short term,'' says Joseph Pechman, director of economic studies at the Brookings Institution, ''lower oil prices are a plus. You get lower inflation and also reduce the tax that OPEC imposes on the American people,'' in the form of money flowing overseas to pay for oil.
If, however, says Mr. Pechman, bargain prices for oil caused energy conservation to slacken and derailed the search for alternative energy sources, the results would be negative.
In real terms, says Lichtblau, the price of oil will decline even if it sticks at $34 a barrel, because inflation will push up the cost of other things while the price of oil stands still.
''This slow reduction,'' he says, ''would be a much better signal than a price collapse, which would cause resurgent demand.''
Normally, Lichtblau says, oil companies begin to build up petroleum inventories in the second quarter of a year -- April through June -- when demand for oil products is low. This year inventory buildup is likely to be postponed until July or August, because stocks remain so high.
Basically, says Lichtblau, he still believes that OPEC's official price of $ 34 a barrel will hold -- not break. But, he adds, the market is getting weaker.
He sees the second quarter as critical. A combination of recession, conservation, and delayed inventory buildup will put additional downward pressure on oil prices. That is the time when prices might really crack.
If, on the other hand, the Saudis cut production and if, over the next six months or so, economic recovery begins in the industrial world, OPEC may emerge -- battered, but intact.