Sept. 3 (Bloomberg) -- Crude oil traded near a four-week high in New York as a hurricane headed toward the Gulf of Mexico and OPEC ministers said the group wouldn't increase production.

The Organization of Petroleum Exporting Countries will maintain existing targets when it meets Sept. 11, the Algerian and Qatari oil ministers said. Hurricane Felix is on a westerly path that could reach Mexico's Cantarell, the world's third-largest oil field, by the end of the week.

``It all paints a picture of tight market supply,'' said Thina Saltvedt, an analyst at Nordea Bank in Oslo. ``The supply side will be tight in the fourth quarter if OPEC don't increase production,'' while Dean and now Felix have sparked concern about the rest of the hurricane season, she said.

Crude oil for October delivery was at $74.17 a barrel, up 13 cents, on the New York Mercantile Exchange at 11:51 a.m. in London. The contract settled at $74.04 at the end of last week, the highest close since Aug. 6. Floor trading on the New York exchange will be shut today for Labor Day.

Brent crude oil for October settlement was at $73.04 a barrel, up 35 cents, on the London-based ICE Futures Exchange. It rose 1.1 percent on Aug. 31.

OPEC, the supplier of more than 40 percent of the world's oil, will keep its current targets during the fourth quarter because the market is well-supplied with crude, Algerian Energy Minister Chakib Khelil said in an interview in Algiers. Qatari Oil Minister Abdullah bin Hamad Al-Attiyah said no change was necessary.

Felix Turns Dangerous

Felix has become a ``dangerous'' storm with 165-mile-per-hour winds, making it a Category 5 hurricane, the highest and most dangerous rank on the Saffir-Simpson scale, the U.S. National Hurricane Center said. It was centered about 490 miles (790 kilometers) east of Cabo Gracias a Dios on the Honduras-Nicaragua border. The system was heading west at 21 miles per hour.

``It's a very strong hurricane, but the track is still uncertain,'' said Olivier Jakob, managing director at Petromatrix GmbH in Zug, Switzerland. ``It is still too early to have full confidence that it will track to the Mexican Bay of Campeche oil fields.''

Oil prices jumped to a then-record $70.85 a barrel on Aug. 30, 2005, after Hurricane Katrina, another Category 5 storm, wrecked rigs and platforms in the Gulf.

The Hurricane Center's forecast puts Felix on a more southerly course than Dean, the first hurricane of the Atlantic season. Dean struck Mexico's Yucatan Peninsula on Aug. 21, then crossed the peninsula into the southern Gulf of Mexico. Mexico's oil production was cut by almost 2.7 million barrels of daily output. More than 80 percent of production was restored by Aug. 25.

Demand Outlook

New York oil prices have fallen 6.1 percent from the record $78.77 a barrel reached on Aug. 1. Prices declined as U.S. gasoline demand waned and prices dropped in the U.S. equity and credit markets. Turmoil in the financial markets threatened to ripple through the economy, slowing growth and weakening demand for energy in the world's largest oil consumer.

The U.S. Federal Reserve will probably lower interest rates to stimulate economic growth at its Sept. 18 meeting, drawing commodity funds back to the oil market, said Nordea's Saltvedt.

Hedge fund managers and other large speculators cut their bets on rising oil prices for a fourth week, according to U.S. Commodity Futures Trading Commission data published Aug. 31.

Net-long positions, the difference between contracts to buy and sell oil, fell 38 percent to 25,178 contracts in the week ended Aug. 28, the lowest in six months.

To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net

Last Updated: September 3, 2007 07:36 EDT