Sept. 3 (Bloomberg) -- Crude oil fell as Royal Dutch Shell Plc and ConocoPhillips said that Hurricane Gustav caused no damage to platforms in the Gulf of Mexico.

Exxon Mobil Corp. said workers are returning to facilities that weren't in the direct path of Gustav. Oil fell 5.3 percent this week as the euro dropped to a seven-month low against the dollar. Prices rebounded from the session's lows on forecasts that tropical storms were forming in the Atlantic.

``The next number we are going to test is $100,'' said Chip Hodge, a managing director at MFC Global Investment Management in Boston, who oversees a $4.5 billion energy-company bond portfolio. ``One hedge fund has shut down and the demand picture here has been ugly, so the market will remain under downward pressure.''

Crude oil for October delivery fell 36 cents, or 0.3 percent, to settle at $109.35 a barrel at 2:41 p.m. on the New York Mercantile Exchange. Prices, which are up 46 percent from a year ago, are 26 percent lower than the record of $147.27 reached on July 11.

Tropical Storm Hanna expanded as it lashed Haiti and the Bahamas with torrential rains, laying a course that forecasters say may take it away from the Gulf and toward South Carolina as a hurricane by the end of the week, the U.S. National Hurricane Center said as of 2 p.m. Miami time.

Farther out to sea, Tropical Storm Ike strengthened to 70 miles per hour and may become a hurricane today, the center said. Tropical Storm Josephine spun in the middle Atlantic Ocean, 305 miles west-southwest of the Cape Verde Islands. Its winds of 65 mph are forecast to weaken later this week.

Reassuring News

``Most of the news about damage has been reassuring,'' said Phil Flynn, senior trader at Alaron Trading Corp. in Chicago. ``I think the market would be falling out of bed if it weren't for Hanna, Josephine and Ike. There's a line of storms forming in the Atlantic that has got to have traders worried.''

Shell said in an e-mailed statement yesterday that initial reports indicate no major damage to the oil producer's onshore facilities in Louisiana. ConocoPhillips said there was no ``significant damage'' to its Magnolia platform in the Gulf.

Anadarko Petroleum Corp. restarted production at its Nansen and Boomvang platforms in the Gulf yesterday and is returning workers to offshore facilities that were outside the path of Gustav. Anadarko was producing the equivalent of about 150,000 barrels a day of oil from the region before the output was shut in preparation for the storm.

Gulf Shutdowns

About 96 percent of crude-oil production in the Gulf and 92 percent of natural-gas output remains halted because of Gustav, the U.S. government said. Producers reported that 91 rigs and 599 platforms are evacuated due to the storm, the Minerals Management Service said today in a statement on its Web site.

About 1.2 million barrels of daily oil production remain shut-in, along with 6.7 billion cubic feet of gas.

The euro fell to the lowest in more than seven months against the dollar after reports showed business investment, exports and retail sales declined, adding to evidence of an economic slump in the single-currency region.

The euro declined to $1.4385, the lowest since Jan. 22, before trading at $1.4474 in New York, from $1.4520 yesterday.

The dollar's recovery will cause the decline in oil prices to continue, OPEC President Chakib Khelil said today in a phone interview, adding that he expects supply to outstrip demand by as much as 1 million barrels a day in the first half of 2009.

The Organization of Petroleum Exporting Countries will meet on Sept. 9 in Vienna to review production targets.

``There is going to be a lot of talk from OPEC because of the drop in prices,'' Hodge said. ``Iran and Venezuela will want to defend high prices at all costs because they need the funds, given all of their social spending. The Saudis might actually want to see prices fall a bit more.''

Brent crude oil for October settlement fell 28 cents, or 0.3 percent, to settle at $108.06 a barrel on London's ICE Futures Europe exchange.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: September 3, 2008 15:27 EDT