* OPEC expected to leave formal output targets unchanged
* Hurricane Ike expected to miss bulk of U.S. Gulf output
(Updates prices)
By Jane Merriman and Matthew Robinson
LONDON, Sept 9 (Reuters) - Oil was near a new five-month low
on Tuesday on expectations that OPEC would leave formal output
targets unchanged and as the threat of Hurricane Ike to U.S.
Gulf of Mexico energy infrastructure receded.
U.S. crude <CLc1> fell $2.07 to $104.27 by 1508 GMT after
hitting a fresh five-month low of $103.71 a barrel earlier.
London Brent crude <LCOc1> traded down $1.95 to $101.49.
OPEC ministers, due to meet later in the day in Vienna, have
said oil prices 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. []
But the Organization of the Petroleum Exporting Countries
could stand ready to trim excess supply above its agreed output
limits to bolster prices that are down sharply from July peaks.
As a whole, OPEC is estimated to be producing about 790,000
barrels per day above a collective ceiling of 29.67 million bpd
for its 12 members with output limits. []
Oil has fallen nearly 30 percent from record highs of more
than $147 a barrel in July, pressured partly by a rebound in the
U.S. dollar and a drop in demand from top energy consumer the
United States.
"OPEC leaving quotas unchanged is a little disappointing for
the market and Ike looks more like a downstream threat at the
current track," said UBS oil strategist Thomas Stenvoll.
HURRICANE IKE
Hurricane Ike approached western Cuba as a Category 1 storm
before heading toward South Texas later in the week, but was
expected to miss the bulk of the U.S. offshore oil and natural
gas platforms in the Gulf. []
Energy companies -- still recovering from Hurricane Gustav
last week -- began shutting production as Ike approached the
Gulf, home to a quarter of U.S. oil production and 15 percent of
natural gas output. []
"If this storm does nothing, I think this could be the event
that pushes oil back below that $100 a barrel area," said Phil
Flynn of Alaron Trading.
The impact of Gustav is expected to be reflected in weekly
U.S. government 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 analysts 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. []
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.
(Additional reporting by Angela Moon in Seoul; editing by
Michael Urquhart)
