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 Gustav Expected to Regain Hurricane Status; Gasoline Inventories Down Again

Tropical Storm Gustav was a key worry for traders, along with data from the Energy Department, which showed an unexpected decline in crude inventories last week as well as a drop in gasoline supplies for the fifth week in a row.
Gustav was downgraded to a tropical storm as it passed over Haiti Wednesday morning, but forecasters expect it to slowly strengthen as it moves away from that country.
Gustav could become a hurricane again in the next day or two, the National Hurricane Center said in an 11 a.m. EDT update.
Energy traders kept a watchful eye out for any changes in its path to the northwest, in the direction of the Gulf of Mexico. The Gulf is home to about a quarter of U.S. oil production, according to Reuters. Read more.
"There is nothing in Gustav's path that will hinder development," said John Kocet, expert senior meteorologist at AccuWeather.com. "There is a strong probability that it will be a Category 3 storm by the time it enters the Gulf, and it has the potential to strengthen into a Category 4 or 5 storm over the Gulf."
Gustav's sustained winds were near 60 miles an hour at the NHC's latest update. A Category 3 hurricane packs winds of 111 to 130 miles an hour.
Gustav would become the first major hurricane in the Gulf since Wilma during the historic 2005 hurricane season, according to AccuWeather.com.
But "it's still way too far out to project a path with any accuracy right now," said Beth Sewell, a managing partner at Quantum Gas & Power Services. Early Wednesday, it looked like New Orleans was a likely target, she said.
"But to get there, it has to go thru a lot of offshore production," said Sewell.

Link to MarketWatch.com full story:
http://www.marketwatch.com/news/story/crude-up-more-1-storm/story.aspx?guid=%7BB8F70645-770A-4621-88DE-D99824E3521C%7D&dist=msr_2