NYMEX-Crude up but off highs as Gustav threatens

* Hurricane Gustav seen as threat to Gulf of Mexico

* Dollar jump pressured crude futures early

NEW YORK, Aug 26 (Reuters) - U.S. crude oil futures rose on Tuesday, lifted from an earlier slide by the possible threat to oil operations from Hurricane Gustav.

"Crude futures moved smartly off the lows of the session after traders shifted their attention to the potential course of Hurricane Gustav," Addison Armstrong, analyst at Tradition Energy, wrote in a research note.

On the New York Mercantile Exchange at 11:51 a.m. EDT (1551 GMT), October crude CLV8 was up $1.14, or 0.99 percent, at $116.25 per barrel, trading from $112.36 to $117.89, just above the $117.46 20-day moving average.

In London, October Brent LCOV8 was up 59 cents, or 0.52 percent, at $114.62 a barrel, trading from $111.65 to $116.52.

Oil companies began storm preparations as forecasters predicted Hurricane Gustav will enter the U.S. Gulf of Mexico as a major storm by the weekend. [ID:nN26422397]

Hurricane Gustav strengthened slightly in the central Caribbean early Tuesday, the U.S. National Hurricane Center said in its latest report. [ID:nN26322225]

The NHC also was monitoring a large low-pressure area about 200 miles east-northeast of the northern Leeward Islands.

Russia announced that Moscow has decided to recognize as independent states two of Georgia's rebel regions. The West had urged against the action. [ID:nLP60422]

A surging dollar helped push NYMEX crude down early on Tuesday. The dollar rose to a six-month high against the euro on weak German GDP data which raised concerns of recession in the euro zone and fueled expectations of interest rate cuts.

U.S. June oil demand was revised lower by 793,000 barrels per day, was down 1.17 million bpd from a year earlier and was at the lowest level for any June month since 1998, the Energy Information Administration said on Tuesday. [ID:nLQ348088]

Sinopec Corp (0386.HK) will get fewer state subsidies this quarter but continue to enjoy a rebate on taxes for importing refined products. [ID:nSP167809]

OPEC meets on Sept. 9 to review production and market share policy and oil markets will be monitoring indications whether the group will keep output steady or cut production.

With a storm threat to refineries and gasoline supplies lower in recent weeks and expected to have fallen last week, refined products futures rallied ahead of Friday's NYMEX September contract expiration.

September heating oil HOU8 was up 5.45 cents, or 1.73 percent, at $3.2059 a gallon, trading from $3.1092 to $3.2710, well above resistance at $3.20 and the $3.2127 20-day moving average.

September RBOB RBU8 was up 4.99 cents, or 1.73 percent, at $2.9322 a gallon, trading from $2.8316 to $2.9918. (Reporting by Robert Gibbons; editing by Jim Marshall)