OIL prices closed below US$104 a barrel yesterday for the first time since early April as traders bet that Hurricane Ike would miss critical US Gulf Coast oil installations. And in Vienna, OPEC's president signaled the cartel would not cut production.

Light, sweet crude for October delivery fell US$3.08 to settle at US$103.26 on the New York Mercantile Exchange, the lowest settlement price since April 1. The contract rose 11 cents to settle at US$106.34 in volatile trading Monday.

In aftermarket trading yesterday, prices tumbled more than US$4 a barrel to a new five-month low of US$101.74.

Crude's decline puts the contract within striking distance of the psychologically important US$100 threshold, a level first reached on Feb. 19.

In London, October Brent crude fell as low as US$98.94 a barrel on the ICE Futures exchange, slipping below US$100 for the first time since April 2. The contract later settled US$3.10 lower at US$100.34 a barrel.

'It looks like a total exodus out of the market right now,' said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. 'Now that Ike and OPEC don't look like threats to supply, the market is running out of reasons to remain strong.'

Ike roared ashore south of the Cuban capital of Havana early yesterday 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 US$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 and BP PLC said they were 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, Connecticut.

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 yesterday 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 US$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 yesterday. '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 US, by far the world's largest oil consumer. US gasoline prices have come down from their summer highs above US$4 a gallon (US$1.05 a liter), 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 US presidential election, which is what would happen if you saw a production cutback,' he said.

In other Nymex trading, heating oil futures fell 8.84 cents to settle at US$2.9247 a gallon, while gasoline prices dropped 9.77 cents to settle at US$2.6526 a gallon. Natural gas for October delivery inched up almost a penny to settle at US$7.535 per 1,000 cubic feet.