* OPEC expected to leave formal output targets unchanged
* Hurricane Ike strengthens, churns toward Gulf of Mexico
(Recasts, updates prices, OPEC comments, adds fresh quote)
By Jane Merriman and Matthew Robinson
LONDON, Sept 9 (Reuters) - Oil fell to a new five-month low
on Tuesday as expectations OPEC would leave formal output
targets steady outweighed concerns over the threat of Hurricane
Ike to U.S. Gulf of Mexico energy infrastructure.
OPEC ministers meeting in Vienna were expected to keep
output targets steady with calls from some to trim excess supply
above agreed limits, about 790,000 barrels per day (bpd)
according to some estimates. []
Officials said oil prices -- which have tumbled nearly 30
percent from record highs over $147 a barrel in July -- are now
more reflective of fundamentals.
"I think everything is in balance -- inventories are in a
healthy position," said Ali al-Naimi, oil minister for Saudi
Arabia, the world's top exporter. []
U.S. crude <CLc1> fell $1.57 to $104.77 by 1222 GMT after
hitting a fresh five-month low of $104.23 a barrel earlier.
London Brent crude <LCoc1> traded down $1.30 to $102.14.
"OPEC leaving quotas unchanged is a little dissapointing for
the market," said UBS oil strategist Thomas Stenvoll.
Traders are keeping a close eye on Hurricane Ike, which
swept toward western Cuba as a Catagory 1 storm early on Tuesday
and is expected to strengthen as it aims for the Gulf of Mexico,
home to a quarter of U.S. oil production and 15 percent of
natural gas output. []
Energy companies -- still recovering from Hurricane Gustav
last week -- began shutting production as Ike approached.
[]
U.S. INVENTORIES
The impact of Gustav is expected to be reflected in weekly
U.S. goverment inventory data, due out on Wednesday.
"We will see more than the usual amount of draws coming out
of inventories both this week and next," said Edward Meir of
broker MF Global.
A Reuters poll of anlayst forecast data would show a 4.3
million barrel draw in U.S. crude oil stocks last week. Gasoline
stocks were seen down by 4.2 million barrels and distillates by
2.5 million barrels. []
Gasoline stocks were seen falling by 4.2 million barrels and
distillates by 2.5 million barrels.
Slumping demand in the United States and other big consumer
nations has sent crude off its record peak.
Surging consumption in China and other emerging economies
sent oil on a six-year rally, with additional support coming
this year from investors pouring cash into commodities as a
hedge against inflation and the weak dollar.
The rebound in the greenback has added additional pressure
to oil prices over the past few months, with the dollar's
hitting a one-year peak against a basket of currencies early
Tuesday before weakening on profit-taking. []
(Additional reporting by Angela Moon in Seoul; editing by James
Jukwey)
