WASHINGTON (AP) – Oil prices fell to a five-month low on Wednesday, dipping below $68 a barrel amid easing gasoline demand at the end of summer and growing doubts among some traders that Iran will pull supplies off the market.

In the past month, crude-oil futures have declined by roughly 12 percent.

Analysts expect OPEC, which meets next week, to maintain its official output target of 28 million barrels per day. And they said if the cartel trims production in an attempt to prop up prices, the strategy could backfire because it would signal to a market that has worried for several years about tight supplies that the world finally has oil to spare.

Further easing supply concerns, Shell Exploration & Production Co. said its Mars platform in the Gulf of Mexico, which was heavily damaged by Hurricane Katrina, is now pumping 20 percent more than before last summer’s storm.

Light, sweet crude for October delivery fell $1.10 to settle at $67.50 a barrel on the New York Mercantile Exchange – the lowest closing price for front-month futures since April 7.

Brent crude for October delivery dropped $1.16 to settle at $66.93 a barrel on the ICE Futures exchange in London.

Oil broker Tom Bentz of BNP Paribas Commodity Futures said the recent downward momentum in oil prices is driving speculators out of the market.

“This is a much-needed correction in prices,” said Bentz.

Traders are keeping an eye on Iran’s diplomatic standoff with the West over Tehran’s nuclear program, though some said they are less worried about an imminent impact on oil markets as the process drags on. Iran announced Wednesday that last-ditch talks on its disputed nuclear program were postponed, moving Tehran a step closer to U.N. sanctions after it defied a deadline to freeze uranium enrichment.

But analysts said they are no longer convinced of a retaliatory oil embargo by OPEC’s No. 2 supplier.

“The market is in a show-me mode when it comes to Iran,” said Phil Flynn of Alaron Trading Corp. in Chicago.

Citigroup analyst Tim Evans said the Organization of Petroleum Exporting Countries, which meets Monday in Vienna, will most likely keep its production quota steady because it “doesn’t want to produce a further price spike that might bring world criticism down on its head and hurt demand. It is willing to accept a minor surplus in the market and some moderation in price.”

Gasoline futures fell slightly Wednesday after dropping to a six-month low the previous day as the passing of Labor Day signaled the end of the summer driving season. Gasoline futures fell less than a penny at $1.64 a gallon.

The average retail price of gasoline nationwide was $2.73 a gallon last week, according to the U.S. Energy Department.

But Eurasia Group energy analyst Greg Priddy said in a research note Wednesday that the recent trend lower in prices may not last because of supply concerns related to Iran and Nigeria.

“Political risk from Iran’s nuclear ambitions remains a factor,” he said, “and the market may be too optimistic in discounting the probability of sanctions.”

Russian Foreign Minister Sergey Lavrov said Wednesday that any sanctions must exclude military force, suggesting that Moscow was contemplating the possibility of sanctions but remained opposed to harsh and quick punishment.

In Nigeria, Priddy cited upcoming primary elections in the Niger Delta region, “which have historically sparked significant unrest.”

AP-ES-09-06-06 1655EDT