Gustav kills nearly 70 in Caribbean

As Gustav churned through the Caribbean, Tropical Storm Hanna formed in the Atlantic Ocean with 40-mph (65-kph) winds. The eighth storm of a busy Atlantic hurricane season was on a track that could threaten the Bahamas and Florida, the U.S. National Hurricane Centre said.

Energy companies prepared for Gustav to deliver what could be the hardest hit to the heart of the U.S. Gulf oil patch since the devastating 2005 hurricane season.

Oil prices rose above $120 a barrel in early trade on Thursday, adding to gains all week, as Gustav aimed deep into the heavy concentration of oil and natural gas platforms off Louisiana and Texas.

But crude prices fell back more than $2 after the U.S. government and the International Energy Agency pledged to release emergency stockpiles if Gustav disrupts production in an area that provides the United States with a quarter of its crude oil and 15 percent of its natural gas.

Gustav was 15 miles (25 km) west of Kingston, Jamaica, at 8 p.m. EDT (1 a.m. British time), the hurricane Centre said. Its top sustained winds were 70 mph (110 kph), just short of the 74-mph (119 kph) hurricane threshold. Forecasters said it could become a hurricane by Friday.

New Orleans, the Southern U.S. city ravaged by Hurricane Katrina three years ago, remained near the middle of the range of possible landfall locations on the U.S. Gulf Coast.

Louisiana Gov. Bobby Jindal put New Orleans residents on alert for possible evacuations starting on Friday, the third anniversary of Katrina's strike, and issued a precautionary disaster declaration. A state of emergency was declared in neighbouring Mississippi, which was also devastated by Katrina.

MOUNTING TOLL

Gustav barged ashore as a hurricane in Haiti on Tuesday and its driving rains took at least 59 lives there and eight in the neighbouring Dominican Republic on the island of Hispaniola.