Oil rises to 101 on Hurricane Ike fears

The contract fell USD 1.71 overnight to settle at USD 100.87.

Exxon Mobil Corp, Valero Energy Corp, ConocoPhillips and Marathon Oil Co have begun halting operations as Ike headed straight for the nation8217;s biggest complex of refineries and petrochemical plants. Wholesale gasoline prices spiked 30 per cent on Thursday.

8220;You have some refineries shutting to prepare for hurricane damage,8221; Tetsu Emori, a commodity markets fund manager with ASTMAZ Futures Co in Tokyo. 8220;That8217;s triggered some buying, especially in oil products such as gasoline and heating oil.8221;

Early today, the storm was centred about 595 kilometres southeast of Galveston, moving to the west-northwest at 12 mph. Top sustained winds were 100 mph.

The storm was expected to strike the Texas coast late Friday or early Saturday. Forecasters said the storm was likely to come ashore as a Category 3, with winds up to 130 mph. The upper Texas coast accounts for one-fifth of US refining capacity.

Ike is huge, taking up nearly 40 per cent of the Gulf of Mexico. The National Hurricane Center said tropical storm-force winds of at least 39 mph extended across more than 820 kilometres.