* Oil slumps $3 to nearly five-month low below $109
* Gustav fears ease as refinery, field damage seen limited
* ExxonMobil, Shell said to tap US emergency crude stocks
(Updates prices)
By Chua Baizhen
SINGAPORE, Sept 2 (Reuters) - Oil plunged almost $3 a
barrel on Tuesday to its lowest since mid-April, extending the
previous day's rout on initial signs that a weakened Hurricane
Gustav spared major Gulf oil facilities.
Early checks by some U.S. refiners reported no damage from
Gustav, which weakened to Category 2 before roaring ashore near
Port Fourchon, Louisiana, on Monday. At least two others were
expected to dip into the U.S. Strategic Petroleum Reserve,
helping ensure steady gasoline and diesel supplies.
U.S. crude <CLc1> fell to $108.55 a barrel by 0647 GMT,
extending Monday's $4 slide to stand almost $3 below trading
levels late on Monday and down almost $7 from Friday's close as
traders discounted Gustav, which had been called the biggest
threat to the sector since 2005's devastation.
Because of the U.S. public holiday a day ago, the New York
Mercantile Exchange did not issue any official settlement
prices.
London Brent crude fell $1.86 or 1.7 percent to $107.55.
With Gustav now just a tropical storm as it churns further
inland, energy companies were starting to assess the potential
damage as they looked to restart the 1.3 million barrels per
day of offshore oil production and over 2.1 million bpd of
refining throughput that was shut ahead of the storm.
But some oil traders are already looking past the storm
toward more bearish factors such as the rising dollar and
weakening demand, hopeful that operators were better prepared
than in 2005, when Katrina and Rita wrecked more than 100
offshore platforms in 2005 and shut several refineries for
months.
"There is another month of peak hurricane season to go, and
there will be other threats," Michael Wittner, global head of
oil research at Societe Generale, said in a research note.
"However, the market reaction to Gustav has confirmed our
opinion that when the disruption threats fade, the underlying
factors are bearish," he said.
The Gulf is home to a quarter of U.S. oil output and more
than a third of U.S. refining capacity.
SPARED?
Valero Energy Corp <VLO.N> said an initial check of its
250,000 barrels per day (bpd) refinery at St Charles,
Louisiana, refinery showed no significant structural damage
from Gustav, and that the plant had electrical power.
[]
ConocoPhillips <COP.N> said remote sensors showed that its
Magnolia platform in the Gulf of Mexico had suffered no damage
from the hurricane. []
Elsewhere, area sheriff offices said no flooding had been
seen at the Exxon Mobil <XOM.N> Chalmette, Murphy <MUR.N>
Meraux and ConocoPhillips <COP.N> Alliance refineries south and
east of New Orleans. []
About a dozen oil refineries representing about 15 percent
of the nation's fuel production capacity were shut and another
10 refineries cut production rates, according to company
officials, trade sources and a report from the U.S. Department
of Energy.
The Louisiana Offshore Oil Port, the only U.S. port capable
of offloading the biggest oil tankers, also halted all
operations due to high winds and waves.
Chevron Corp <CVX.N> said production was cut at its 330,000
barrel per day (bpd) refinery in Pascagoula, Mississippi, due
to the closure of the ship channel, but expected output to
resume as soon as the channel opens. The channel was expected
to reopen once weather from Hurricane Gustav clears.
The U.S. government has said it is ready to release crude
from the nation's 700 million barrel emergency stockpile if
Gustav triggers a prolonged disruption to supply.
Louisiana Governor Bobby Jindal said on Monday that Exxon
Mobil Corp <XOM.N> would ask for crude oil from the U.S.
emergency supply on Tuesday and Shell Oil Co <RDSa.L> was
expected to make a similar request. []
(Reporting by Chua Baizhen, Editing by Jonathan Leff)
