Tropical Storm Gustav heading for vulnerable Haiti

MIAMI (Reuters) - The Atlantic hurricane season's seventh tropical storm formed in the central Caribbean on Monday and could strengthen into a hurricane before striking vulnerable Haiti, the U.S. National Hurricane Center said.

Tropical Storm Gustav threatened the impoverished Caribbean nation of some 9 million people with as much as 25 inches (64 cm) of rain, which could trigger deadly floods and mudslides. It was expected to hit Hispaniola, the island shared by Haiti and the Dominican Republic, on Tuesday.

Oil prices rose as Gustav stirred concerns about disruptions to U.S. oil and gas output in the Gulf of Mexico and served as another reminder of predictions that this six-month storm season will be busier than usual. At least one computer forecasting model showed it could enter the Gulf.

Hurricane warnings were issued for the southern coasts of the Dominican Republic and Haiti west of Barahona.

Gustav was about 180 miles south-southeast of Port-au-Prince, the Haitian capital, at 5 p.m. (2100 GMT) on Monday and was moving toward the northwest at 14 mph (23 kph), the Miami-based hurricane center said.

The storm's top sustained winds were at 60 mph (95 kph), and the center's official forecast saw them at around hurricane strength of 74 mph (120 kph) when it reached southwest Haiti within 48 hours.

'INTENSE RAINS'

Haiti was still recovering from the passage of Tropical Storm Fay, the remnants of which were causing flooding across the U.S. southeastern states on Monday. Fay may have killed more than 50 people in Haiti last week, including dozens missing after floodwaters swept a bus down a river.

Forecasters said Gustav could produce rainfall of 5 to 7 inches over Hispaniola, with the possibility of 15 to 25 inches in some isolated areas.

"These intense rains may produce life-threatening flash floods and mudslides," the hurricane center said.

Haiti is vulnerable to devastating floods because its hillsides have been stripped of trees by people desperate for charcoal to be used as cooking fuel. In 2004, Tropical Storm Jeanne was blamed for flooding that killed some 3,000 people and spring floods killed another 2,000 earlier that year.

The official forecast called for Gustav to move to the northwest across Haiti and over Cuba toward the Gulf of Mexico, but the computer models used to predict the future path of hurricanes disagreed significantly.

Some had it moving more toward the west, south of Cuba in the direction of Jamaica and then Mexico's Yucatan peninsula. Another showed Gustav moving over Cuba and into the Gulf. Yet another had it crossing Hispaniola and heading into the open Atlantic.

Energy markets have been riveted by the movements of tropical storms and hurricanes since the devastating Atlantic hurricane seasons of 2004 and 2005, when a series of storms disrupted oil and gas production.

The 2005 season saw Katrina, the costliest hurricane in U.S. history with some $80 billion in damage, as well as Rita and Wilma, all of which raged through the Gulf.

(Additional reporting by Michael Christie in Miami, Editing by Eric Walsh)