Oil prices elow $105

LONDON (AFP) - Oil prices tumbled on Tuesday to four-month lows below 105 dollars a barrel after Hurricane Gustav spared energy facilities in the Gulf of Mexico and the US currency strengthened, analysts said. "Hurricane Gustav weakened once it reached the US Gulf Coast, putting pressure on the energy market," said Andrey Kryuchenkov, an oil analyst at the Sucden brokerage in London. "The much feared hurricane was downgraded to a tropical storm and the dollar reached a 10-month high against a basket of major currencies (Tuesday), also helping to push oil prices lower." A stronger dollar makes oil more expensive for buyers paying in other currencies, which reduces demand, leading to lower prices. Brent North Sea crude for October fell to 104.14 dollars at one stage on Tuesday, hitting levels last seen on April 4. It later recovered to stand at 107.30 dollars, a fall of 2.11 dollars from Monday's close. New York's main contract, light sweet crude for October, dropped as much as 10 dollars to 105.46 dollars a barrel from its closing level on Friday - an exaggerated drop as it caught up with Brent following a public holiday in the United States Monday when markets were closed. It then rallied a little to stand at 108.86 dollars, down 6.60 dollars from Friday. Hurricane Gustav weakened to a tropical depression as it blew across Louisiana after ripping through the Caribbean as a powerful storm, the National Hurricane Center said on Tuesday. The storm slammed ashore Monday as a Category Two hurricane packing winds of 110 miles (175 kilometers) per hour but steadily weakened overland. "While 100 percent of crude oil production in the Gulf of Mexico was shut in, no damages to any of the refineries have been reported on early inspection," said Kevin Norrish, oil analyst at Barclays Capital. He added that Shell said "it should have production back on in three to five days." Elsewhere on Tuesday, Iran called for the Organization of Petroleum Exporting Countries to discuss over-production by some members at its meeting in Vienna on September 9. "The oil supply should be proportionate to demand and control of excess supply is an issue which should be addressed at the upcoming OPEC meeting," Oil Minister Gholam Hossein Nozari told the official IRNA news agency. "Some OPEC members are providing the market with excess supply and producing more than their OPEC quota. Therefore, at the next meeting the members will request a stop to the excess supply," he added. Falling demand for crude oil because of a slowing global economy has caused oil prices to drop in recent weeks from their record highs of more than 147 dollars a barrel reached in July. Some members of OPEC, which produces about 40 percent of world oil, have expressed concerns over the recent fall in prices, sparking speculation the cartel could cut output if the price falls below 100 dollars. One hundred dollars a barrel is "a minimum" for oil prices, said the Iranian minister, whose country is the world's fourth-largest crude producer. Analysts also say that a struggling US economy has curbed demand for crude oil.

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