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SINGAPORE - World oil prices rose by less than one US dollar in Asian trade on Monday after Hurricane Gustav forced the shutdown of almost all oil production in the Gulf of Mexico, analysts said.
New York's main contract, light sweet crude for delivery in October, rose 84 cents to 116.30 US dollars a barrel from its close of 115.46 dollars when trading closed Friday at the New York Mercantile Exchange.
Brent North Sea crude for October gained 72 cents to 114.77 US dollars from 114.05 US dollars in London on Friday.
About one quarter of US oil production comes from the Gulf, one of the largest energy production hubs in the Americas, but US officials said on Sunday that more than 96 per cent of Gulf oil production and 82 per cent of natural gas output had been stopped in the face of the storm.
Gustav was on target to plough into coastal Louisiana on Monday, potentially as a Category 4 storm with sustained winds of 150 miles (242 kilometres) per hour and storm surges up to 16 feet (4.8 metres) above normal.
"It's all about Gustav," said Tony Nunan, of Mitsubishi Corp's international petroleum business in Tokyo.
But he said price gains had been limited because of underlying worries about a global economic slowdown and falling demand for oil.
World oil prices have sunk from record highs above 147 US dollars a barrel in early July after surging from 100 US dollars at the start of the year.
Monday's rise of about one dollar was "not really that much", Nunan said, adding that trading would be thin because the US markets were shut for the Labour Day holiday.
If oil facilities survive the hurricane undamaged, the oil price could continue its trend down towards 100 US dollars. But damage on the scale of Hurricane Katrina three years ago could generate a price surge to 120 US dollars, he said.
The threat of Gustav raised grim memories of the 2005 hurricanes Katrina and Rita that damaged or destroyed about 165 of about 4,000 oil platforms in the Gulf.
US energy giant ExxonMobil said Sunday it had completed storm preparations for its Gulf Coast oil and gas operations. Workers on offshore platforms had been evacuated, the company said.
"We are also releasing personnel from onshore facilities anticipated to be in or near the path of the storm," it said in a statement, adding the company expected to continue supplying its customers.
One of its refineries, in Chalmette, Louisiana, was being shut down but Exxon's other refineries and chemical plants on the Gulf Coast remained in operation as of Sunday, ExxonMobil said.
Shell, in addition to its offshore facilities, was also shutting a number of its coastal refineries and chemical plants while putting others on standby.
British oil group BP and US rival ConocoPhillips also began evacuating their offshore workers as Gustav loomed.
Oil industry analyst Andy Lipow based in Houston, Texas, said there would be a supply disruption, "but how quickly can the industry recover is going to be the key."
Lipow said the oil industry was now better prepared for storms, both with offshore and onshore facilities. - AFP/ir
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