NEW YORK Oil prices closed below $104 a barrel Tuesday for the first time since early April as traders bet that Hurricane Ike would miss critical Gulf Coast oil installations and in Vienna, OPEC's president signaled the cartel wouldn't cut production.
Light, sweet crude for October delivery fell $3.08 to settle at $103.26 on the New York Mercantile Exchange, the lowest settlement price since April 1. Earlier, prices dipped as low as $102.20. The contract rose 11 cents to settle at $106.34 in volatile trading Monday.
Crude's decline puts the contract within striking distance of the psychologically important $100 threshold, a level first reached on Feb. 19.
In London, October Brent crude fell $4.14 to $99.30 a barrel on the ICE Futures exchange, slipping below $100 for the first time since April 2.
Ike roared ashore south of the Cuban capital of Havana early Tuesday after shifting course overnight on a track that could hit anywhere from northern Mexico to Corpus Christi, Texas well south of major oil and natural gas installations in the Gulf of Mexico. The storm also weakened Monday from a Category 3 storm to a Category 1.
"All of the signals are that this hurricane will be a miss as far as infrastructure goes, so that should keep us moving toward $100 a barrel," said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.
Still, forecasters warned that a low-pressure system could nudge the storm to the north, limiting the downward pressure on oil prices.
ExxonMobil said it was evacuating an undisclosed number of workers from offshore Gulf facilities that could be in the storm's path.
"There's still the possibility that Ike could be a real devil and if nothing else cause additional precautionary evacuations and shutdowns" of Gulf platforms and rigs, said Peter Beutel, energy analyst at Cameron Hanover, New Canaan, Conn.
Oil market traders were also keeping a close watch on an OPEC meeting in Vienna, Austria.
Oil ministers from the Organization of Petroleum Exporting Countries meet Tuesday to decide whether to hold production levels steady despite crude's steep decline in recent months. Prices have plunged about 30 percent since surging to a record $147.27 a barrel on July 11.
Iran and other hawkish members have been pushing the 13-member body to trim output in an effort to lift prices or at least halt the decline. But Saudi Arabia, the cartel's largest member, and a number of other countries have been less vocal about possible cutbacks.
In a strong indication of how a majority of countries are leaning, OPEC President Chakib Khelil suggested Tuesday there was a consensus on production among members.
"We will probably stay at the (present) level," Khelil, also Algeria's oil minister, told reporters.
Earlier, Saudi Oil Minister Ali Naimi suggested the kingdom, which accounts for about a third of all OPEC output, prefers not to tighten the spigots for now.
"The market is fairly well balanced," Naimi told reporters after arriving in Vienna in the dawn hours of Tuesday. "I think things are in balance, in a healthy position."
Kuwait's oil minister, Mohammed Abdullah Al-Aleem, also said there is no need for OPEC to cut production.
Oil analyst and trader Stephen Schork, speaking by phone from Vienna, said he expects ministers will keep production constant for now.
Part of the reason, he said, would be to avoid sparking a politically motivated firestorm in the U.S., by far the world's largest oil consumer. U.S. gasoline prices have come down from their summer highs above $4 a gallon, but still remain nearly a dollar higher than they were a year ago.
"I don't think the Saudis or OPEC in general want to project themselves into the U.S. presidential election, which is what would happen if you saw a production cutback," he said.
In other Nymex trading, heating oil futures fell 10.28 cents to $2.9103 a gallon, while gasoline prices dropped 11.15 cents to $2.6388 a gallon. Natural gas for October delivery tumbled 7.7 cents to $7.45 per 1,000 cubic feet.