* Oil falls below $110 a barrel
* Gustav fears ease as refinery, field damage seen limited
* IEA will not release emergency stocks
(Updates throughout, adds byline)
By Robert Campbell
NEW YORK, Sept 2 (Reuters) - Oil fell below $110 a barrel
on Tuesday for the first time since April as traders bet the
U.S. oil industry would recover quickly from Hurricane Gustav.
Early indications that oil installations suffered only
minor damage from the storm returned the market's focus to
bearish factors including slowing global energy demand growth,
rising inventories and a stronger U.S. dollar.
U.S. crude <CLc1> settled down $5.75 at $109.71 a barrel
after trading as low as $105.46. London Brent crude <LCOc1>
settled down $1.07 at $108.34 a barrel.
U.S. crude settled below its 200-day moving average price
for the first time since May 2007, which is considered by many
traders evidence that prices may fall further. Oil prices have
tumbled nearly $40 a barrel since the July 11 record high of
$147.27 as bullish sentiment has evaporated.
"It would take a really major storm to change the direction
in crude oil in the midst of its major correction since July,
and Gustav is not it," said Chris Jarvis, senior analyst at
Caprock Risk Management in Hampton Falls, New Hampshire."
A third of U.S. refining capacity has been affected in some
way by Gustav, with at least 10 plants completely shut down.
Early inspections have not turned up any significant damage at
the shuttered facilities.
All of the 1.3 million barrels per day of oil production in
the Gulf of Mexico, a quarter of U.S. domestic production, was
shut, though no damage to platforms or any oil spills were
noted during inspection flights conducted by the U.S. Coast
Guard on Tuesday.
"If it were not for these (storm) threats, we would have
been testing $100 already," said Mike Wittner, energy analyst
at Societe Generale.
Oil traders have been nervous about hurricanes since
hurricanes Katrina and Rita devastated the U.S. oil industry in
2005, wrecking over 100 offshore platforms and shutting several
major refineries for months of repairs.
Tropical Storm Josephine, the 10th named storm of the
Atlantic hurricane season, formed off West Africa on Tuesday.
The International Energy Agency, which had been prepared to
release emergency oil stocks in the event Gustav caused severe
damage, announced on Tuesday it saw no need for emergency
supplies.
Hurricane Ike continued to move westward across the
Atlantic and was projected to be in the vicinity of the Bahamas
by Sunday, according to the U.S. National Hurricane Center.
(Additional reporting by Jane Merriman and Barbara Lewis in
London and Chua Baizhen in Singapore; editing by Jim Marshall)
