Crude Oil Is Steady Before U.S. Supply Report; Ike Strengthens

By Mark Shenk

Sept. 4 (Bloomberg) -- Crude oil was little changed as analysts were split over whether a U.S. government report will show an inventory increase or drop, and as Hurricane Ike gained strength over the Atlantic.

Eight analysts surveyed by Bloomberg News expect today's supply report to show an increase, and six expected a drop. Ike, the third major hurricane of the Atlantic season, strengthened into a Category 4 storm and may head for the Gulf of Mexico, home to more than one-fifth of U.S. oil production.

``There are a lot of different expectations ahead of the report later today,'' said Peter Beutel, president of New Canaan, Connecticut-based Cameron Hanover Inc. ``It's unusual to see such a divergence in views.''

Crude oil for October delivery fell 10 cents to $109.25 a barrel at 9:27 a.m. on the New York Mercantile Exchange. Futures are down 26 percent from the record $147.27 reached on July 11. Prices are up 46 percent from a year ago.

The Energy Department is scheduled to release its weekly report today at 11 a.m. in Washington, a day later than usual because of the Labor Day holiday on Sept. 1.

Tropical Storm Hanna lashed the Bahamas after killing dozens in Haiti and may strike the U.S. Southeast as a hurricane, according to the U.S. National Hurricane Center. Ike is a Category 4 storm, the second-strongest on the five-step Saffir- Simpson scale, the center said. The hurricane's eye was 550 miles northeast of the Leeward Islands and moving west-northwest.

``We've got a conveyer belt of storms, which is cause for concern,'' Beutel said. ``One has to be worried that one of these will be worse than what we've seen so far. Ike especially bears watching.''

Brent crude oil for October settlement fell 23 cents to $107.83 a barrel on London's ICE Futures Europe exchange.

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