Oil Is Steady as U.S. Output Resumes, OPEC to Keep Production

By Nesa Subrahmaniyan and Grant Smith

Sept. 4 (Bloomberg) -- Crude oil was little changed near $109 a barrel as the biggest U.S. oil-import terminal resumed operations after Hurricane Gustav.

The Louisiana Offshore Oil Port, may start deliveries today after shutting ahead of the hurricane, a port spokeswoman said. OPEC, supplier of 40 percent of the world's oil, will maintain output at its Sept. 9 meeting, according to a Bloomberg survey.

``The damage from Gustav was minor, refineries are better than we'd thought and the situation for now is okay,'' said Eugen Weinberg, an analyst Commerzbank AG in Frankfurt. ``We're still looking for a short-term jump in the oil price because there are a number of `positive' catalysts such as the OPEC meeting and the dollar.''

Crude oil for October delivery traded at $109.71 a barrel, up 36 cents, at 9:40 a.m. London time on the New York Mercantile Exchange. Prices have declined 26 percent from the record $147.27 reached on July 11.

Royal Dutch Shell Plc and ConocoPhillips said yesterday that Hurricane Gustav caused no damage to platforms in the Gulf of Mexico. Exxon Mobil Corp. workers are returning to production facilities, according to the company.

Valero Energy Corp. and ConocoPhillips, the U.S.'s two biggest refiners, prepared to start units that were shut in preparation for Gustav.

Price declines were limited in yesterday's trading session on forecasts that more tropical storms were forming in the Atlantic.

Hanna, Ike, Josephine

Tropical Storm Hanna expanded as it lashed Haiti and the Bahamas with torrential rains, laying a course that may take it away from the Gulf and toward South Carolina as a hurricane by the end of the week, the U.S. National Hurricane Center said at 11 p.m. Miami time.

Farther out to sea, Hurricane Ike's winds strengthened to 70 miles (113 kilometers) per hour. Tropical Storm Josephine in eastern Atlantic Ocean, packed winds of about 60 mph that are forecast to weaken later this week, the center said.

``Refiners likely managed Gustav more efficiently than Katrina, so the storm damage to refining infrastructure will likely be lighter and more temporary than three years ago,'' Antoine Halff, head of energy research at Newedge USA LLC in New York, said in a report yesterday.

About 1.2 million barrels, or 96 percent, of daily oil production in the Gulf remain shut-in, along with 6.7 billion cubic feet, or 92 percent, of gas, according to the U.S. government. Producers reported that 91 rigs and 599 platforms are evacuated due to the storm, the Minerals Management Service said yesterday on its Web site.

Stockpile Report

The Energy Department is scheduled to release its weekly report on Sept. 4 at 11 a.m. in Washington, a day later than usual because of the Labor Day holiday.

Supplies of crude oil probably rose 450,000 barrels in the week ended Aug. 29 from 305.8 million barrels the prior week, according to the median of responses by 14 analysts before an Energy Department report tomorrow.

Brent crude oil for October settlement was at $108.42 a barrel, 36 cents higher, on London's ICE Futures Europe exchange at 9:08 a.m. London time. Yesterday, prices closed down 28 cents, at $108.06 a barrel.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net