LONDON, Oct 30: Oil prices slumped on Tuesday by about $2 as traders banked some of their recent record gains, following news that output would restart in Mexico after a stoppage.

New York’s main futures contract, light sweet crude for delivery in December, tumbled by $2.13 to $91.40 per barrel, after striking a record high $93.80 on Monday.

Brent North Sea crude for December delivery meanwhile dropped $1.66 to $88.66 per barrel in late deals on Tuesday. The day before it had shot up to an historic $90.49.

“Oil prices were lower on Tuesday, coming off from record highs and bucking an impressive four-day rally amid profit-taking,” said Sucden analyst Michael Davies in London.

“Investors were locking in profits, after oil surged to record highs on news about a Mexican supply outrage and following the broad weakness in the dollar.” Mexico’s state oil company Pemex said it would resume 600,000 barrels per day of shut-in production.

The company was forced to suspend about a fifth of its production at the start of this week because of tropical storm fears, but now expects to recommence production by Wednesday.

Crude futures were also hit by market expectations of rising US energy stockpiles. The US Department of Energy publishes its weekly inventories report on Wednesday.

Despite Tuesday’s falls, oil prices have rocketed by about 50 per cent over the past year although adjusted for inflation, they remain below levels reached after the 1979 Iranian revolution.

Current prices would have to go just above $100 to reach outright as well as nominal highs, according to calculations by economists.

Elsewhere, Opec’s “basket” price of crude oil, based on production in 12 different countries, has risen above $85 a barrel for the first time, the cartel said on Tuesday.—AFP