* Oil falls hovers at $99, early signs show little Ike
damage
* Losses limited as market await more news on Ike fallout
* News on Lehman Brothers, Merrill Lynch cloud outlook
(Updates prices, details on Lehman failure)
By Fayen Wong
PERTH, Sept 15 (Reuters) - Oil tumbled below $100 a barrel
to a six-month low on early signs that Hurricane Ike may have
spared key Gulf Coast infrastructure, although traders were
cautious on Monday as they awaited status reports on more Texas
refineries.
The upside for oil, which has lost about 32 percent since
its peak of over $147 in mid-July, was also limited as
financial woes mounted after talks to rescue Lehman Brothers
<LEH.N> faltered and Bank of America Corp <BAC.N> agreed to buy
Merrill Lynch & Co Inc, which has also been struggling with
mortgage-related debt.
U.S. light crude for October delivery <CLc1> fell $2.14 or
2.1 percent to $99.04 a barrel by 0223 GMT. London Brent crude
<LCOc1> fell $1.73 to $95.85.
U.S. prices dived as low as $98.46 -- the lowest since Feb.
26 -- on Sunday, when the New York Mercantile Exchange held a
special trading session due to Hurricane Ike.
"The sell-off is partly because Hurricane Ike hasn't done
significant structural damage to oil facilities as well as
growing concerns about the economy," said David Moore, a
commodities strategist at the Commonwealth Bank of Australia in
Sydney.
"It has been quite a spectacular turn of events at Lehman
and Merrill and the stresses in the financial system are
sparking concerns about economic outlook and how that will
weigh on global energy demand."
The ruptured U.S. financial system faces an unprecedented
shake-up with Lehman Brothers set to file for bankruptcy, Bank
of America buying Merrill Lynch, and the Federal Reserve saying
for the first time it will accept stocks in exchange for cash
loans. []
If Lehman and Merrill disappear or get taken over, then
three of the top five U.S. investment banks would have
dissolved or been bought inside six months. Bear Stearns was
acquired in a fire sale by JPMorgan in March.
Oil has fallen steadily since mid-July's peak of over $147
a barrel amid mounting evidence that high energy costs and a
weakening economy are cutting deeply into fuel consumption.
Oil firms rushed to their offshore facilities and coastal
refineries to check for damage on Sunday after Hurricane Ike's
direct hit on the Houston energy hub left a quarter of U.S. oil
and refined fuel production idled and millions without power.
Early reports from emergency officials and oil companies
indicated little or no severe damage to infrastructure --
signalling a possible quick recovery to production -- but
firms warned that supply problems were likely in the near term.
[]
The U.S. Coast Guard said it had received reports of damage
to offshore facilities in the Gulf of Mexico, but added details
were still not available. []
The U.S. government said on Sunday it loaned a total of
309,000 barrels of strategic crude to two oil refiners having
trouble procuring supplies in the storm's wake [],
ConocoPhillips and Placid Oil.
Even as oil prices fell on Sunday, gasoline prices at the
U.S. pumps rose more than six cents to nearly $3.80 a gallon,
adding to a 5-cent increase on Sunday, as retail fuel supply
concerns mounted in Ike's wake.
Chevron Corp <CVX.N> said in a statement that it may not be
possible for itself and other other manufacturers "to maintain
normal supplies in the coming days", while Shell Oil <RDSa.L>
said its 332,000 barrel per day joint venture refinery in Deer
Park, Texas, requires repairs after damage from Hurricane Ike.
In Nigeria, the country's most powerful militant group on
Sunday declared an "oil war" in the Niger Delta after two days
of gunbattles with security forces in the world's
eighth-largest oil exporter. []
(Editing by Ben Tan)
