Gustav Preparations - More than 75 % of Gulf Oil production Turned off (prices at the pump Raise)

By ALAN SAYRE
AP Business Writer

NEW ORLEANS — More than three-quarters of the Gulf of Mexico's offshore oil production had been cut off Saturday as energy companies evacuated petroleum platforms in the face of Hurricane Gustav.

The federal Minerals Management Service, which manages offshore leases, said 76.8 percent of the Gulf's daily oil production of 1.3 million barrels, or 998,000, had been stopped. The platform shutdowns also cut off 37 percent of the Gulf's daily production of 7.4 billion cubic feet of natural gas, or 2.75 billion cubic feet.

The MMS said 223 fixed production platforms had been shut down and evacuated, along with 45 drilling rigs, which are mobile and explore for petroleum. The agency said 717 staffed production platforms and 121 drilling rigs are currently operating in the Gulf.

About 35,000 people work in the Gulf, staffing offshore rigs and production facilities, among other tasks, according to the MMS.

Forecasters said Hurricane Gustav could reach the U.S. Gulf Coast early Tuesday, and stands to cross many petroleum areas of the Gulf that took damage from Katrina and Rita about three years ago. Those storms destroyed 115 of the Gulf's 4,000 oil and gas platforms, damaged 52 others and triggered petroleum price spikes.

The Gulf produces roughly 25 percent of the nation's oil and 15 percent of its natural gas.

Retail gas prices swung higher Friday —- the first increase in 43 days —- as analysts warned that a direct hit on U.S. energy infrastructure by Hurricane Gustav could send pump prices hurtling toward $5 a gallon.

Meanwhile, oil prices ended the day slightly lower, falling for a second straight session. But prices fluctuated sharply as some traders feared supply disruptions and others bet that the government will release supplies from the Strategic Petroleum Reserve if Gustav wreaks havoc in the Gulf of Mexico area —- home to a quarter of U.S. crude supplies and 40 percent of refining capacity.

Gustav was spinning away from Jamaica on a course toward Gulf Coast states including Louisiana —- three years to the day after Hurricane Katrina slammed into the state and tore up oil rigs and refineries.

Fears of another monster storm have sent wholesale gasoline prices shooting up in the Gulf region, forcing filling stations to pass on the costs by raising pump prices ahead of the Labor Day weekend.

A gallon of regular gasoline jumped about a penny overnight to a national average of $3.669, according to auto club AAA, the Oil Price Information Service and Wright Express.

That’s the first increase since prices peaked at an average $4.114 a gallon on July 17, an all-time high.