Crude Oil Futures Up as Gustav Hits Offshore Rigs

Crude oil for October delivery rose $1.55, or 1.3 percent, to $117.01 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 8:40 a.m. in Singapore, Gavin Evans and Margot Habiby of Bloomberg reported early Monday. Prices, which dropped 7 percent in August, are up 22 percent this year.

Personnel from more than 70 percent of the platforms and rigs in the Gulf have been evacuated as the storm approaches, the U.S. Minerals Management Service said in a statement on its Web site yesterday. About 1.25 million barrels a day of oil and 6.09 billion cubic feet of gas have been shut, or more than 96 percent of offshore oil output and 82 percent of gas production.

Gasoline for October delivery gained 7.18 cents, or 2.5 percent, to $2.9260 a gallon on the exchange. Electronic transactions started early to allow market participants to respond to Gustav. Trades will be dated Sept. 2 because of today's Labor Day holiday in the U.S.

``We're more prepared for this storm than we ever have been for any hurricane that I remember,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``We're better prepared, and demand isn't that strong anyway, so I'm about as optimistic as I can be in this type of disastrous situation.''

Brent crude oil for October settlement rose $1.35, or 1.2 percent, to $115.40 a barrel on the ICE Futures Europe Exchange today.

The Gulf of Mexico accounts for 26 percent of U.S. oil production and 14 percent of natural-gas output. The Gulf normally produces about 1.3 million barrels of oil and an estimated 7.4 billion cubic feet of gas a day, according to the agency, part of the U.S. Interior Department.

CNNMoney.com examined Gustav's overall impact on consumers and the oil industry. David Goldman reports:

Much offshore oil production has already been shut down and experts say it could get worse. It could damage gasoline refineries, which could send the price of oil and gas back up near record highs.

"Production will be shut down in the path of the storm," said Cathy Landry, a spokeswoman for the American Petroleum Institute. "Not every rig will be in the storm's path, but the oil companies tend to be very cautious."