Crude Oil May Rise as Gustav Moves Toward U.S., Survey Shows

By Mark Shenk

Aug. 29 (Bloomberg) -- Crude oil may rise next week on forecasts that Tropical Storm Gustav will strike production platforms in the Gulf of Mexico.

Eleven of 29 analysts surveyed by Bloomberg News, or 38 percent, said prices will increase through Sept. 5. Nine of the respondents, or 31 percent, said oil will decline and nine said prices will be little changed. Last week 55 percent expected futures to increase.

Gustav, downgraded to a tropical storm on Aug. 27 may regain hurricane strength of at least 74 mph at any time, the National Hurricane Center said. Tropical Storm Hanna formed northeast of the Bahamas yesterday, the center said.

``We have Gustav headed toward the U.S. and right behind us there is Hanna,'' said Peter Beutel, president of energy consultant Cameron Hanover Inc. in New Canaan, Connecticut. ``At some point one of these is bound to hit.''

The Gulf of Mexico is home to 26 percent of U.S. oil output and 14 percent of the country's gas production. In 2005 Hurricane Katrina closed 95 percent of offshore output in the region.

Crude oil for November delivery rose $1, or 0.9 percent, to $115.59 a barrel so far this week on the New York Mercantile Exchange. Futures have dropped 22 percent since touching $147.27 a barrel on July 11, the highest since trading began in 1983.

The oil survey has correctly predicted the direction of futures 49 percent of the time since its start in April 2004.

     Bloomberg's survey of oil analysts and traders, conducted
each Thursday, asks for an assessment of whether crude oil
futures are likely to rise, fall or remain neutral in the coming
week. The results were:

                   RISE      NEUTRAL    FALL
                    11          9        9

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.