* Traders eye weak demand as Gustav threat eases
* Storms Hanna, Ike developing in Atlantic
* U.S. data Thursday seen showing crude build, gasoline draw
(Updates throughout, changed dateline from previous SINGAPORE)
LONDON, Sept 3 (Reuters) - Oil fell to $108 a barrel on
Wednesday, weighed down by slowing demand in the United States
and other consuming nations and signs the U.S. oil sector would
recover quickly from Hurricane Gustav.
U.S. crude <CLc1> traded down $1.62 to $108.09 a barrel by
0857 GMT after settling below its 200-day moving average for the
first time since May 2007 on Tuesday.
London Brent crude <LCOc1> fell $1.63 to $106.71 a barrel.
Prices have tumbled more than $7 from Friday on expectations
Hurricane Gustav would hit U.S. Gulf of Mexico oil installations
as it churned toward the coast.
Initial checks showed little damage to U.S. installations
from the storm after companies shut down 13 refineries and shut
in all of the 1.3 million barrels per day (bpd) of oil
production in the Gulf and 95.4 percent of the region's natural
gas output.
Analysts said that with no signs of major damage from the
storm, slowing demand in the United States and other consumer
nations would continue to weigh on oil prices, which have
plummetted from a record over $147 in July.
"It's the economy, economy, economy. Everyone's worried
about demand destruction," said Robert Nunan, a risk management
executive at Tokyo-based Mitsubishi Corp.
Surging oil demand in emerging economies such as China and
India underpinned a six-year rally in crude prices that sent
prices up sevenfold at their peak.
Further strength this year came from a rush of cash from
investors buying commodities as a hedge against inflation and
the weak U.S. dollar. Gains in the greenback against other major
currencies over the past two months have helped push crude
prices down nearly $40 a barrel.
The dollar rose to an 11-month high against a basket of
major currencies on Wednesday, on a souring global economic
outlook.
Traders are also eyeing more storms brewing in the Atlantic.
Tropical Storm Hanna may possibly strike the U.S. East Coast,
while Hurricane Ike continued westward across the Atlantic and
was projected to be in the vicinity of the Bahamas by Sunday.
A Reuters poll of analysts, ahead of U.S. government oil
inventory data to be released on Thursday, forecast stockpiles
of crude rose 100,000 barrels last week, a 1.3 million-barrel
drawdown in gasoline supplies and a 500,000-barrel build in
distillates. []
The data, released a day later than usual due to Monday's
public holiday, will not capture most of the supply disruptions
caused by Gustav, analysts said.
(Reporting by Matthew Robinson in London and Chua Baizhen in
Singapore, editing by Anthony Barker)
