* Oil nears $115, Tropical storm Fay threatens Gulf of
Mexico
* Some oil firms have withdrawn non-essential workers
* Russia will begin pulling out its forces from Georgia
(Releads, updates prices, analyst's comment)
By Fayen Wong
PERTH, Aug 18 (Reuters) - Oil rose over $1 to near $115 a
barrel on Monday as investors eyed a potential supply threat
from Tropical storm Fay to oil and gas production in the Gulf
of Mexico.
Royal Dutch Shell <RDSa.L> and Marathon Oil Corp <MRO.N>
have pulled non-essential workers from the eastern and central
Gulf of Mexico due to the storm threat, but offshore production
was unaffected, the companies said on Sunday. []
U.S. light crude for September delivery <CLc1> was up $1.13
to $114.90 a barrel by 0055 GMT. The contract settled down
$1.24 at $113.77 a barrel on Friday, after dipping to $111.34,
the lowest level since May 2.
London Brent crude <LCOc1> rose $1.02 to $113.57 on Monday.
"The storm threat is the main driver here," said Gerard
Burg, a commodities analyst at the National Bank of Australia
in Melbourne.
"Oil prices also fell to the lower end of the recent
trading range on Friday, so some traders in the market probably
saw that as a buying opportunity."
On Sunday local time, Fay was expected to avoid most of the
offshore production areas in the Gulf and instead strike the
Gulf Coast of Florida on Tuesday or Wednesday, according to the
U.S. National Hurricane Center forecast.
Some computer models, however, predict Fay may enter
eastern Gulf of production areas before making landfall on the
coast of Alabama or Mississippi.
Fay is the third storm of the 2008 Atlantic hurricane
season to threaten U.S. offshore oil and natural gas
production.
The two previous storms had only temporarily shut fractions
of offshore production and did not outweigh geopolitical
factors or the U.S. economic outlook in determining oil and
refined products prices.
Analysts said a rising U.S. dollar and news that Russia
would begin withdrawing its troops from Georgia, a key supply
route from the Caspian to Europe, could limit oil's gains.
Russia announced it would begin withdrawing forces from
Georgia on Monday after a war that dealt a humiliating blow to
the black sea state and raised fears for energy supplies to
Europe [].
Crude has fallen sharply since reaching an all-time high of
$147.27 a barrel on July 11 as growing global economic problems
and high fuel prices have cut demand in top consumer the United
States as well as Europe.
OPEC member Venezuela said on Friday that oil market
fundamentals are in "perfect equilibrium" and there was no need
to vary OPEC output.
"We don't believe there's a need to place additional volume
on the market," Oil Minister Rafael Ramirez told Reuters in the
capital of Paraguay, where he attended the swearing in of
Paraguay's new president. []
In Nigeria, twelve Nigerian militants and a naval officer
were killed in a gun battle on Friday near a Royal Dutch Shell
<RDSa.L> natural gas plant in the oil-producing Niger Delta,
military and security forces said. []
(Reporting by Fayen Wong; Editing by Louise Heavens)
