* Hurricane Ike churns towards Gulf of Mexico
* OPEC expected to leave formal output target unchanged
(Updates prices, comments from Iran)
By Ikuko Kao and Matthew Robinson
LONDON, Sept 8 (Reuters) - Oil rose on Monday as Hurricane
Ike spun towards the U.S. Gulf of Mexico oil hub and traders
awaited OPEC's decision this week on output policy.
OPEC ministers gathering in Vienna were expected to leave
formal production targets unchanged as Ike threatened U.S.
offshore oil installations still recovering from Hurricane
Gustav last week. []
U.S. crude <CLc1> traded up 92 cents to $107.15 a barrel by
1506 GMT, after hitting a five-month low on Friday on weaker
demand from the United States and other developed economies.
London's Brent crude futures <LCOc1> gained 84 cents to
$104.93 a barrel after a problem with the trading system halted
all activity on the Intercontinental Exchange <ICE.N> for more
than an hour. Trading resumed at 1355 GMT.
"Whilst observing the goings on in Vienna over the next few
days, keep one eye on Hurricane Ike," Robert Laughlin with MF
Global said.
Preparations for Ike have stalled recovery efforts after
Gustav, which shuttered oil production and refineries in the
region as it barrelled onshore. []
Ike weakened into a Category 2 storm on Monday after roaring
ashore in northeastern Cuba, but was expected to strengthen into
a dangerous Category 3 hurricane when it enters the Gulf of
Mexico, home to a quarter of U.S. oil production and 15 percent
of natural gas output. The storm was expected to reach the Gulf
by Tuesday afternoon before heading toward the eastern Texas
coast. []
For a graphic on Hurricane Ike, please double click on:
https://customers.reuters.com/d/graphics/HR_IKE3.jpg
OPEC
OPEC ministers were widely expected to leave formal targets
unchanged when they meet late on Tuesday, as Ike gave prices a
lift following a two-month drop that has sent crude down from
record highs over $147 a barrel.
"I don't believe there is any possibility we will change
production levels," Ecuador's Oil Minister Galo Chiriboga told
reporters on Sunday.
Some ministers argue the market is amply supplied following
months of overproduction led by Saudi Arabia.
"As a first step we need some discipline, some members are
producing above their commitment," Iran's OPEC governor Mohammad
Ali Khatibi told Reuters. []
"Any members who are producing more than their commitment
must come back to their commitment."
Officials from Saudi Arabia, the world's top exporter, have
not yet arrived in Vienna to comment on output policy.
The head of the International Energy Agency, adviser to 27
industrialised countries, said on Monday OPEC should maintain
output levels to help bring down oil prices. []
High fuel prices and the wider economic crisis have clipped
demand in the United States, sending prices down nearly 30
percent over two months after surging demand from China and
other developing economies sent crude on a six-year rally.
Hopes that a U.S. bailout of top mortgage lenders Fannie Mae
and Freddie Mac would help temper an economic downturn also
provided some support to the oil market in early activity.
[]
(Reporting by Ikuko Kao and Matthew Robinson in London, Fayen
Wong and Nick Trevethan in Perth; Editing by Anthony Barker)
