HURRICANE IKE HITS GULF OF MEXICO and FLORIDA KEYS

The National Hurricane Center said Hurricane Ike is expected to emerge from land and strengthen in the southeastern Gulf of Mexico later Tuesday.
If the hurricane hits the Texas-Mexico border as expected under some projections, Ike 's core will avoid the refinery-rich coastline north between Texas and Louisiana, but oil and gas companies are still evacuating personnel and shutting down offshore production.
Currently packing maximum sustained winds of more than 75 miles per hour as a Category 1 hurricane on the Saffir-Simpson scale, Ike moved across Cuba and sparked tropical-storm advisories in the Florida Keys and elsewhere.
Ike is moving west-northwest at a speed of about 13 miles an hour. The storm made landfall in Cuba at 10:30 a.m. Eastern and was last tracked about 65 miles west-southwest of Havana at 2 p.m. Eastern..
Oil and gas drillers began evacuating platforms in the Gulf of Mexico, but crude prices nevertheless fell below $104 a barrel for the first time since April, with OPEC expected to keep production stable at a key meeting in Vienna. See Futures Movers.
The warm waters of the Gulf of Mexico will allow Ike to regain strength, likely reaching at least Category 3 status before landfall, according to AccuWeather.com. The weather service projects Ike to slam into the extreme south side of Texas over the weekend.

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Linda Rafield, senior oil analyst at Platts and editor of Platts Futures & Derivatives Review, said that the latest projections have Ike coming to shore near the Mexico-Texas border, which would put it south of much of the coastal oil and gas infrastructure.
However, she noted that the path could change as the storm moves into the Gulf of Mexico.
On Tuesday, the Minerals Management Service said personnel have been evacuated from a total of 167 production platforms, equivalent to 23 % of the 717 manned platforms in the Gulf of Mexico.
Personnel from 44 jack-up and other shallow water rigs have also been evacuated; this is equivalent to 36.4 % of the 121 rigs currently operating in the Gulf.
Ike first made Caribbean landfall on Saturday as a Category Four giant, plowing across Turks and Caicos and the southern Bahamas. Haiti also suffered damage from Ike, which was the fourth major storm to affect the impoverished nation in recent weeks. More than 600 people have died in Haiti as a result of tropical storms so far this year, according to reports.

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For the oil and gas industry, Ike represents a further possible selling point for the sector, beaten up of late on costs tied to Hurricane Gustav last month.
Jacques Rousseau of BackBayResearch.com said Tuesday that low-utilization rate and large inventory declines are being tied to Gustav. The storm caused the shutdown of approximately 2.5 million barrels per day of refining capacity, and another 1.4 million barrels per day of capacity to run at reduced rates.