* Oil up slightly as Hurricane Ike threatens Gulf
* Gains limited as dollar hits 11-month high versus euro
* OPEC expected to leave formal output target unchanged
(Recasts, updates prices with U.S. settlement, adds details
throughout, changes dateline from LONDON)
By Richard Valdmanis
NEW YORK, Sept 8 (Reuters) - U.S. oil prices rose slightly
on Monday as Hurricane Ike took aim at the U.S. Gulf of
Mexico's cluster of offshore rigs, most of which remained
paralyzed in the wake of last week's Hurricane Gustav.
The one-two punch likely will carve deeply into U.S. energy
inventories, as the source of a quarter of domestic crude and
15 percent of the United States' natural gas lies dormant for a
fresh blow of high winds and waves.
U.S. crude futures <CLc1> settled up 11 cents at $106.34 a
barrel after dipping to a five-month low of $104.70. London's
Brent crude futures <LCOc1> , trading at a steep discount to
the U.S. benchmark, fell 65 cents to $103.44.
Gains in the U.S. oil market were tempered after the U.S.
government's takeover of mortgage financiers Fannie Mae and
Freddie Mac fueled a run up in the U.S. dollar.
A strong greenback tends to lower commodity prices by
weakening the purchasing power of buyers using other
currencies.
"The storm concerns appear to be overriding the dollar,"
said Tom Bentz, analyst at BNP Paribas in New York.
Energy companies Shell Oil <RDSa.L>, Anadarko <APC.N> and
others began evacuating workers ahead of Ike, which struck Cuba
late Sunday on a track that could take it into the Gulf of
Mexico Tuesday and into the Gulf Coast by the weekend.
The Gulf of Mexico's oil production already was mostly shut
down due to the effects of Hurricane Gustav, which crossed
through the Gulf of Mexico just over a week ago.
Some 79.4 percent of the 1.3 million barrels per day of
normal oil output from the Gulf of Mexico remained shut as of
Monday, along with 64.2 percent of its 7.4 billion cubic feet
per day of natural gas output, the U.S. government reported
on Sunday. []
Onshore, three refineries with a combined capacity of
330,000 bpd, amounting to 1.8 pct of U.S. capacity, remained
shut Monday in Gustav's wake -- reflecting a strong recovery
from the peak when 15 refineries representing more than 15
percent of U.S. refining capacity were shut down.
OPEC ministers gathering in Vienna for their output policy
meeting scheduled for Wednesday were expected to leave formal
production targets unchanged due to the threat from the
hurricanes. []
For a graphic on Hurricane Ike, please double click on:
https://customers.reuters.com/d/graphics/HR_IKE3.jpg
"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 argued that the market was 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. []
Officials from Saudi Arabia, the world's top exporter, have
not yet arrived in Vienna to comment on output policy.
Oil prices have dropped sharply from peaks over $147 a
barrel in mid-July amid mounting evidence that high energy
prices and slowing global economic growth are hitting demand
for fuel.
High fuel prices and the wider economic crisis have clipped
demand in the United States, the world's largest energy
consumer, to around 3,5 percent below last year, according to
recent government figures.
(Reporting by Ikuko Kao and Matthew Robinson in London,
Fayen Wong and Nick Trevethan in Perth, Richard Valdmanis in
New York; Editing by David Gregorio)
