National gas prices slip nearly to March '99 levels

CAMARILLO, Calif. >> Gasoline prices fell an average of 3 cents a gallon nationwide in the last two weeks to their lowest level in nearly three years.

But motorists shouldn't expect the trend to last much longer.

Pump prices could bottom out as early as January, as retailers try to halt sliding profits, oil prices continue to rise, and major oil-producing nations implement an expected production cut, said Trilby Lundberg, an industry analyst, in a report issued yesterday.

Prices have fallen the past 15 weeks, tumbling 44.61 cents a gallon since Sept. 7, when the national average weighted price for all three grades was $1.56 a gallon. On Dec. 21 the weighted average was $1.12, according to the national Lundberg Survey.

In March 1999, gasoline averaged $1.08 a gallon, unadjusted for inflation.

The ongoing decline has amazed some analysts because the cost of crude oil has risen steadily the last five weeks.

OPEC likely to reduce oil output dramatically

CARACAS, Venezuela >> Venezuelan President Hugo Chavez said yesterday that OPEC will agree to reduce oil output by 1.5 million barrels per day at an extraordinary cartel meeting Friday in Cairo.

"The minister of energy and mines leaves tomorrow for Cairo, Egypt, for the extraordinary meeting of OPEC, which will surely decide on that 1.5 million bpd OPEC cut," Chavez said during his weekly TV and radio show, "Hello President."

The Organization of Petroleum Exporting Countries said during its last regular meeting in November that it would reduce output by 1.5 million bpd from Jan. 1 if non-OPEC producers cut production by 500,000 bpd.

Japanese plan cuts budget to rein in mounting debt

TOKYO >> Japan's Cabinet endorsed a budget plan for the next fiscal year, proposing a record cut in spending to rein in debt that is the highest of any industrialized nation.

Japan plans for 47.5 trillion yen ($367 billion) in general spending, which excludes debt payment costs and subsidies to local governments, for the fiscal year starting April 2002 -- the first reduction in four years and the biggest ever.

While Prime Minister Junichiro Koizumi keeps his pledge to limit new bond sales, some analysts say his austerity may drive the faltering economy into a deeper recession.

"Koizumi must handle contradictory goals in the next year's budget," said Kazutaka Kirishima, chief economist at Sumitomo Mutual Life Research Institute. "There are no ways for the government to reverse the economy's decline unless Koizumi returns to an extravagant spending spree, and he has rejected the choice."

Koizumi, who still enjoys support from 80 percent of the people after eight months in office, faces increasing opposition to his plan to cut spending as the world's second-largest economy shrinks. The government said Wednesday the economy will contract 1 percent this fiscal year, and forecast zero growth next year.

In other news . . .

New York >> HotJobs.com Ltd., a job-listing Web site, plans to accept Yahoo! Inc.'s $436 million cash and stock offer unless TMP Worldwide Inc, parent of Monster.com, increases its all-stock bid before Thursday morning.