* Oil firmer above $116 after losing more than $2
* Gustav expected to enter the Gulf as major hurricane
* Focus on OPEC, Georgia tensions ahead of U.S. holiday
(Adds details)
By Osamu Tsukimori
TOKYO, Aug 29 (Reuters) - Oil rose more than $1 to near
$117 a barrel on Friday as energy companies prepared for
Tropical Storm Gustav to deliver what could be the hardest hit
to the heart of U.S. offshore production since the devastating
2005 hurricane season.
Crude for October delivery <CLc1> was trading up $1.16 at
$116.75 a barrel by 0245 GMT, after rising more than $1 to as
high as $116.89 earlier.
That pared Thursday's loss of $2.56, triggered after the
U.S. government and the International Energy Agency pledged to
release emergency stockpiles if Tropical Storm Gustav disrupted
U.S. oil production.
London Brent crude <LCOc1> rose $1.11 to $115.28 a barrel.
Tropical Storm Gustav was forecast to strengthen into a
hurricane by Friday as it neared the Gulf of Mexico, home to a
quarter of U.S. crude oil production and 15 percent of its
natural gas output. []
Electronic trading was relatively calm ahead of the U.S.
Labour Day holiday on Monday.
"Gustav is expected to become a Category 3 hurricane at the
least, and possibly 4 or 5," said Akira Kamiyama, derivatives
trader at Mitsui & Co. "Amid thin trading, it is a given never
to find yourself in short positions."
Oil companies were preparing platforms for the storm,
expected to enter the Gulf as a major hurricane on Sunday and
possibly reach catastrophic strength. []
Shell Oil Co <RDSa.L>, the largest producer in the Gulf of
Mexico with an average of 370,000 barrel per day of oil
equivalent, said it expects to shut all of its Gulf of Mexico
production over the next two days as it evacuates workers from
offshore platforms. []
Anadarko Petroleum Corp <APC.N> said it expects to shut all
its production, including the Independence Hub, the largest
offshore natural gas processing facility, by Sunday as it
evacuates all offshore staff.
Forecaster Planalytics said that any damage to offshore
platforms would not be long-lasting, after predicting on
Wednesday that up to 85 percent of the Gulf's oil and natural
gas production could be shut in by Gustav.
Further support came after UK newspaper The Daily Telegraph
reported on Friday that the Russian government had told at
least one of its oil companies to prepare for a possible cut in
shipments to Europe in days in response to threatened
sanctions, citing a single unidentified source. []
The dollar held firm against a basket of currencies on
Friday, consolidating gains made the previous day on data
showing the U.S. economy grew at a faster pace than initially
thought during the second quarter. []
OPEC could cut output at a meeting in September but will
most likely maintain current production levels, Venezuela's Oil
Minister Rafael Ramirez said on Thursday. []
The U.S. Department of Energy said on Thursday the
government was ready to release crude oil from the Strategic
Petroleum Reserve if Gustav seriously disrupted supplies. The
International Energy Agency said member nations were ready to
release strategic oil stocks.
On Thursday, U.S. government data showed a record build in
natural gas storage last week, casting a bearish tone.
[]
Traders were also eyeing an OPEC meeting scheduled for
Sept. 9 in Vienna, as well as escalating tensions between
Russia and Georgia.
NYMEX floor trading will be closed on Monday, Labour Day.
Electronic trading on Globex will not be affected.
(Reporting by Osamu Tsukimori; Editing by Louise Heavens)
