* Oil above $119 on fears of supply disruptions
* Could exceed last week's high of $122.04 by end of day
* Focus on storm's impact on Gulf of Mexico energy
facilities
(Adds comment, details)
By Osamu Tsukimori
TOKYO, Aug 28 (Reuters) - Oil rose for a fourth straight
day to above $119 a barrel on Thursday, on fears Tropical Storm
Gustav may hit the Gulf of Mexico after it morphs into a major
hurricane, crippling the heart of U.S. offshore production.
Crude for October delivery <CLc1> rose 93 cents to $119.08
a barrel by 0656 GMT, after earlier hitting an intraday high of
$119.25 and chalking a gain of $3.56 over the past three
sessions. London Brent crude <LCOc1> was up $1.03 cents at
$117.25 a barrel.
Gustav is expected to hit the U.S. Gulf Coast around Monday
as the first major hurricane to threaten U.S. energy
installations there since Katrina and Rita in 2005, and about
85 percent of U.S. offshore oil and gas production could be in
its path.
AccuWeather said Gustav could strengthen into a Category 4
or 5 storm over the Gulf -- home to a quarter of U.S. crude oil
production and 15 percent of the nation's natural gas output.
Shell Oil Co, the U.S. Gulf of Mexico's largest producer,
said its oil production would be affected as early as Thursday
as it evacuated all workers from offshore operations. Gustav
could shut down 85 percent of U.S. production platforms in the
Gulf, private forecaster Planalytics said. []
"It looks as though the hurricane is on track to inflicting
damage," said Ken Hasegawa, an analyst at broker Newedge in
Tokyo, adding the storm is the only major reason behind the
extended gains in oil prices. "It would be very difficult to be
in a short position today and tomorrow."
Hasegawa added oil prices could surpass last week's high of
$122.04 by the end of day.
"This is the time of the year that (hurricane) premiums can
be put into the market, $10 to $15 a barrel," said Peter
McGuire, managing director of Commodity Warrants Australia.
"(There is the) Labour Day holiday on Monday, and the market
will be shut. There's a lot of nervousness in the market."
McGuire said oil could hit around $130 over the next week
and a half on hurricane worries. Oil was last at that level
five weeks ago.
Analysts say U.S. companies could be forced to draw on oil
inventories to compensate for disruptions.
U.S. government data showed an unexpected, 100,000 barrel
drop in U.S. crude inventories last week, against forecasts of
a 1 million barrel rise. []
The dollar slipped from a six-month high against the euro
on Thursday after comments by European Central Bank officials
the previous day scaled back speculation about an ECB rate cut.
[]
Traders were also eyeing an OPEC meeting scheduled for
Sept. 9 in Vienna as well as escalating tensions between Russia
and the West after U.S. President George W. Bush condemned
Russia for recognising breakaway regions in Georgia.
Venezuelan President Hugo Chavez on Wednesday said oil
prices were fair, and the nation's energy minister said OPEC
should keep output steady or make cuts at its next meeting in
September. []
(Editing by Ben Tan)
