* Oil above five-month lows, near $109
* Gustav fears ease as refinery, field damage seen limited
* IEA says no need to release oil stocks
(Adds Bush, IEA comments, updates prices)
By Jane Merriman
LONDON, Sept 2 (Reuters) - Oil was around $109 a barrel on
Tuesday after sliding to five-months lows when initial reports
showed Hurricane Gustav had spared major U.S. Gulf oil
facilities.
U.S. crude <CLc1> was $109.53 a barrel by 1444 GMT, down
$5.93 from Friday's close. It touched a session low of $105.46,
its lowest since April 2.
A U.S. public holiday on Monday meant the New York
Mercantile Exchange did not issue an official settlement price
for U.S. crude on Monday.
London Brent crude <LCOc1> was down 92 cents at $108.49.
As the hurricane was downgraded to a tropical storm, the
market refocused on bearish factors including a softer global
economy, weaker demand for oil and a stronger U.S. dollar.
These had already begun to drive down prices, which have
dropped about $40 from a peak of $147.27 a barrel on July 11.
Hurricane Gustav, combined with Russia's conflict with
Georgia, which disrupted flows of oil and gas, had halted the
slide.
"If it were not for these threats, we would have
been testing $100 already," said Mike Wittner of Societe
Generale.
An upturn in the dollar, plus falls in oil demand in the
United States and China, the world's top two energy consumers,
look set to exert further pressure on the market.
The weak dollar contributed to oil's surge this year as
investors turned to oil as a hedge. The U.S. currency has shown
signs of bottoming out and hit a 10-month peak against a basket
of currencies on Tuesday. []
"Economic woes and the dollar strength will help oil move
down. It's highly likely to go below $100," said Christopher
Bellew of Bache Commodities Limited.
LIMITED DAMAGE
U.S. President George W. Bush said the full impact of Gustav
was still unclear.
"It's a little early right now to come up with a solid
assessment," he said. "There are some encouraging signs."
[]
Early checks by some U.S. refiners reported only limited
damage from Gustav, which had originally been classed as the
biggest threat to the U.S. Gulf oil sector since devastation
from Hurricane Katrina in 2005.
Oil companies began checking oil rigs, refineries and
pipelines on Tuesday. []
Some 1.3 million barrels per day of offshore oil production
and some 2.67 million bpd of refining capacity was shut because
of the storm. []
The Gulf is home to a quarter of U.S. oil output and more
than a third of U.S. refining capacity.
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. []
The International Energy Agency had stood ready to release
strategic oil stocks if necessary.
"There is no big oil supply disruption so there is no need
for the IEA to make an action," Aad van Bohemen, head of
emergency planning preparation division at the IEA, which
advises industrialised countries on energy.
(Additional reporting by Barbara Lewis in London and Chua
Baizhen in Singapore; editing by Anthony Barker)
