August 27, 2008 / 1:36 PM / 11 years ago

U.S. Gulf oil cos watch, prepare for storm Gustav

HOUSTON, Aug 27 (Reuters) - U.S. Gulf of Mexico oil and natural gas producers were closely watching Tropical Storm Gustav on Wednesday morning while making plans to evacuate workers from offshore platforms.

U.S. crude oil CLV8 was up more than $3, trading above $119 per barrel, on fears about Gustav’s impact on Gulf production, which provides 25 percent of U.S. oil output and 15 percent of the nation’s natural gas production.

“More and more of the tracks are all in agreement. Somewhere between Houston and New Orleans we’re going to have a problem. That’s the heart of the platforms. And they’re still saying Category 3 or higher,” Commercial Brokerage Corp’s Ed Kennedy said on Wednesday.

U.S. forecasters said the storm was expected to strengthen to a major hurricane when it entered the Gulf of Mexico by Sunday with winds greater than 111 miles per hour.

If that forecast holds, Gustav will be the first major storm to menace Gulf of Mexico oil and fuel production since 2005’s devastating hurricanes Katrina and Rita, which shut 25 percent of U.S. oil and fuel production.

On Wednesday, Petrobras PET4.SA spokesman Ciro Ribeiro said the company was nearing a decision on evacuations.

“Depending on the way it takes, tomorrow they are going to make a decision whether to evacuate the platforms, either Friday or Saturday,” Ribiero said on Wednesday.

Shell Oil (RDSa.L), the largest Gulf producer, said on Tuesday it could decide as early as Wednesday to evacuate nonessential workers from its platforms.

Companies first fly nonessential workers from platforms and then remove workers who are essential to production. It’s at about that time the companies halt offshore production. (Reporting by Erwin Seba, Rebekah Kebede, Eileen Moustakis; Editing by Walter Bagley)

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