LONDON, Sept 2: Oil prices tumbled on Tuesday to four-month lows below $105 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 at one stage on Tuesday, hitting levels last seen on April 4. It later recovered to stand at $107.30, a fall of $2.11 from Monday’s close.

New York’s main contract, light sweet crude for October, dropped as much as $10 to $105.46 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, down $6.60 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 Centre said on Tuesday.

The storm slammed ashore Monday as a Category Two hurricane packing winds of 110 miles per hour but steadily weakened overland.

“While 100 per cent 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 Organisation of Petroleum Exporting Countries to discuss over-production by some members at its meeting in Vienna on September 9.—AFP