PORT-AU-PRINCE Hurricane Gustav hit the southern coast of vulnerable Haiti on Tuesday and could become the first major storm to threaten U.S. oil and gas production in the Gulf of Mexico since the devastating 2005 hurricane season.
Oil futures rallied sharply as traders watched Gustav's potential threat to U.S. energy infrastructure in the Gulf of Mexico and were up around 1 percent by mid-afternoon.
Most computer models used to predict hurricane tracks showed Gustav headed toward Louisiana and Texas, areas where offshore rigs produce a quarter of U.S. crude oil and 15 percent of its natural gas and which were slammed by hurricanes Katrina and Rita three years ago.
The seventh storm of the 2008 Atlantic hurricane season barged ashore on Haiti's southwestern peninsula about 10 miles
west of Jacmel with top sustained winds of 90 mph (145 kph), a Category 1 hurricane on the five-step Saffir-Simpson intensity scale, the U.S. National Hurricane Center said.
Gustav was about 40 miles southwest of Port-au-Prince, the crowded and dilapidated Haitian capital, by 2 p.m. EDT and was moving toward the northwest at 10 mph (16 kph).
Royal Dutch Shell Plc, one of the largest producers in the region, said it would begin evacuating nonessential personnel from offshore rigs on Wednesday.
Gustav was likely to move westward south of Cuba over deep warm waters that provide tropical cyclones with fuel.
That could boost Gustav to the top of the hurricane scale if it stayed over water and spent little time over land, forecasters warned. If it became a Category 3 or higher -- known as "major" storms -- in the Gulf of Mexico, it would be the first since Hurricane Wilma of 2005.
"If Gustav is able to thread the needle, passing through the Yucatan Channel into the Gulf of Mexico, it could intensify to Category 4 or 5 strength over the warm water in the Gulf," private forecaster AccuWeather said.
HAITI ON ALERT
Haiti's southern regions, hard hit by Tropical Storm Fay last week, were under a red alert, the highest level.
Gustav threatened the Caribbean nation of 9 million people with 4 to 8 inches of rain, with the possibility of up to 20 inches in isolated mountainous areas, the U.S. hurricane center said.
Haiti is vulnerable to deadly mudslides and flash floods because its hillsides have been stripped of trees by people seeking charcoal for cooking fuel.
"The hurricane is very dangerous. We ask people to take it very seriously," said Marie Andre Jeudi, a spokeswoman for Haiti's weather service. "We are asking people living near the sea or near rivers to immediately leave those places and look for safer places."
She said the government had suspended flights to and from Port-au-Prince for at least 18 hours starting Tuesday morning.
Fay may have killed more than 50 people in Haiti, including dozens missing in the south after floodwaters swept a bus down a river. In 2004, Tropical Storm Jeanne was blamed for flooding that killed around 3,000 people, while spring floods that year killed another 2,000 Haitians.
Hurricane alerts were issued for parts of the Dominican Republic, Haiti, Cuba and Jamaica. Dominican President Leonel Fernandez declared a partial state of emergency as the storm began dousing his country's southern coast.
Forecasters said Gustav's winds could reach 120 mph (193 kph) by the weekend, turning it into a major storm.
Hurricane Katrina was a monstrous Category 5 storm in the Gulf in August 2005 before killing 1,500 people on the U.S. Gulf coast and devastating New Orleans as a Category 3 storm.
Katrina and Hurricane Rita knocked out a quarter of U.S. fuel production in 2005 and sent oil prices soaring after wrecking production platforms and offshore pipelines and battering several major oil refineries.
(Additional reporting by Robert Campbell in New York and Erwin Seba in Houston; Writing by Jim Loney; Editing by Michael Christie and Vicki Allen)