LONDON, Sept 9: Oil prices slumped close to $101 a barrel on Tuesday, their lowest reading since the start of April, with Opec set to hold output at current levels.Brent North Sea crude for delivery in October dropped as low as $101.27 a barrel. It later stood at $101.75, a loss of $1.69 from Monday’s close.

New York’s main contract, light sweet crude for October, shed $2.16 to $104.18 a barrel. It had fallen at one point to $104.09.

“Market participants are focusing on the all important Opec meeting in Vienna,” said Sucden analyst Andrey Kryuchenkov.

The Opec, which pumps 40 percent of world crude, will decide to keep the level of its production unchanged at its meeting later on Tuesday, the group’s president said.

“We are going to stay with the level of production where we are now,” Opec President and Algerian Energy Minister Chakib Khelil told reporters on Tuesday.

Opec’s meeting in the Austrian capital is the group’s first official gathering since March.

Some analysts had suggested Opec would cut its excess output, estimated at about one million barrels per day above its official production quota of 29.67 million bpd. They also believe that Saudi Arabia would be happy to see prices fall below $100 to help stimulate global economic growth which has slowed sharply in recent months.

Crude futures had closed mixed on Monday as the market focused on the looming Opec moot and as Hurricane Ike headed toward energy installations in the Gulf of Mexico.

The US exerted huge pressure on its ally Saudi Arabia to increase production when prices were rising. Saudi Arabia hiked production by 500,000 bpd in May and June.

With prices now falling, this Opec meeting has cast a spotlight on the minimum price that group members would like to see.

Iran and Venezuela have identified 100 dollars as their floor, Ecuador has referred to 110-120 dollars as “reasonable,” while analysts see Saudi Arabia and other Gulf states as being comfortable with a figure below 100 dollars.

“The Saudi position was that prices were too high,” said Vera de Ladoucette, an analyst at the CERA energy consultancy.

“I believe that the ceiling for them isn’t 100 dollars but rather 80. They are watching what is happening and prices have certainly fallen, but they are still 12pc higher than at the beginning of the year.” Iraqi Oil Minister Hussein al-Shahrastani said on Tuesday that fair prices for oil were “where they are.”—Agencies