Oil Edges Higher as Gustav Threatens U.S. Gulf

Oil edged higher in a quiet special electronic trading session on Sunday as Hurricane Gustav took aim at a swath of U.S. oil fields and refineries.
U.S. crude oil futures were up $1.24 at $116.70 a barrel at 2140 GMT, after trading as high as $118.60 after the electronic market was opened.
The New York Mercantile Exchange opened trading on the CME Globex platform at 1630 GMT on Sunday, three and half hours earlier than normal, to facilitate trading before Gustav makes landfall.
Gustav was expected to be a major Category 3 hurricane by Monday morning when it will slam into the Louisiana coast, west of New Orleans.
"This could be potentially the most dangerous storm for the energy sector we've ever seen. It is going right across the most important areas. I am sure we are going to have some damage from this to deal with," said Chris Jarvis, senior analyst at Caprock Risk Management in Hampton Falls, New Hampshire.
More than 96 percent of oil production in the U.S. Gulf of Mexico was shut down by Sunday, according to the U.S. government. The Gulf produces approximately 1.3 million barrels per day of crude oil, roughly a quarter of U.S. domestic output.
At least nine oil refineries with a combined capacity of 2.2 million bpd, were shut down and several other refineries had reduced throughputs because of the storm.
OPEC AHEAD
Iran's oil minister said on Sunday $100 a barrel was the lowest acceptable price for crude oil. Iran, the second-largest producer in the Organization of Petroleum Exporting Countries, has said the oil market is oversupplied in recent weeks as oil prices have plunged more than $30 a barrel from its peak over $147 set in mid-July.
OPEC meets in Vienna on September 9 to discuss output policy but other member nations have not come out and publicly backed Iran.