Oil prices dived under $105 on Tuesday, reaching four-month lows, after Hurricane Gustav apparently spared key United States energy facilities and Iran said the Organisation of the Petroleum Exporting Countries (Opec) must tackle excess production by members.
New York’s main contract, light sweet crude for October, dropped as much as $10 dollars to $105,46 a barrel from its closing level on Friday.
New York crude then rallied a little to stand at $105,96, down $9,50 from Friday. US markets were closed on Monday for the Labour Day holiday.
Brent North Sea crude for October fell to $104,14 at one stage, hitting levels last seen on April 4. It later recovered to stand at $104,86, a fall of $4,55 from Monday’s close.
Hurricane Gustav was downgraded to a category-one storm on Monday, easing fears that it could be as bad as the Hurricane Katrina disaster of 2005, which damaged major offshore oil installations in the Gulf of Mexico.
Meanwhile, on Tuesday, Iran called for Opec to discuss quota-busting 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.
$100 a barrel is “a minimum” for oil prices, said the minister, whose country is the world’s fourth-largest crude producer. — AFP