New Orleans nervously watching Hurricane Gustav's path

Hurricane Gustav is shown off the coast of San Juan, Puerto Rico. (Associated Press Photo)

By By JONATHAN M. KATZ
The Associated Press

8/28/2008

New Orleans began planning a possible mandatory evacuation, hoping to prevent the chaos it saw after Hurricane Katrina struck three years ago Friday. Mayor Ray Nagin left the Democratic National Convention in Denver to help the city prepare.

Gustav was the cause of flooding that killed 23 in Haiti and the Dominican Republic, was nearly stationary about 80 miles east of Kingston, Jamaica, but it was expected to run west-southwest, very close to Jamaica later in the day, according to the National Hurricane Center in Miami.

Maximum sustained winds were near 70 mph and it could become a hurricane again soon.

The storm was projected eventually to reach Category 3 force, causing jitters from Mexico's Cancun resort to the Florida Panhandle and sending oil prices jumping above $119 a barrel on Thursday on fears it could slow production of oil in the Gulf of Mexico. Prices had dipped below $113 a barrel on the New York Mercantile Exchange early in the week.

Royal Dutch Shell PLC said it is evacuating some 300 workers from offshore Gulf rigs, while BP PLC was also removing personnel from the region that is home to about a quarter of U.S. crude production and much of its natural gas.

Some models showed Gustav taking a path toward Louisiana and other Gulf states devastated by Hurricanes Katrina and Rita three years ago.

Gustav hit Haiti as a hurricane on Tuesday, causing floods and landslides that killed 15 people on Haiti's deforested southern peninsula, where it dumped 12 inches or more of rain. A landslide buried eight people, including a mother and six of her children, in the neighboring Dominican Republic.

Gustav's projected track pointed directly at the Cayman Islands, an offshore banking center where residents boarded up homes and stocked up on emergency supplies.

Forecasters said Gustav might slip between Mexico's Yucatan Peninsula and the western tip of Cuba on Sunday, then March toward a Tuesday collision with the U.S. Gulf Coast — anywhere from south Texas to the Florida panhandle.

"We know it's going to head into the Gulf. After that, we're not sure," said meteorologist Rebecca Waddington at the National Hurricane Center. "For that reason, everyone in the Gulf needs to be monitoring the storm."

"A bad storm churning in the Gulf could be a nightmare scenario," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "We might see oil prices spike $5 to $8 if it really rips into platforms."