Aug. 29 (Bloomberg) -- Natural gas in New York rose as Tropical Storm Gustav prompted producers to evacuate workers from oil and natural gas platforms in the Gulf of Mexico.

The projected track of the storm takes Gustav over the Gulf Coast energy region by Sept. 2. Gulf platforms produce 1.3 million barrels of oil and 7 billion cubic feet of gas a day. The storm and evacuations may reduce the flow of gas from the Gulf, which accounts for about 14 percent of U.S. supplies.

``If there is damage from Gustav, we're clearly going to $10 or $12'' per million British thermal units, said Peter Linder, an analyst and senior adviser at DeltaOne Energy Fund in Calgary. ``At $8, this has a lot of legs to go higher.''

Natural gas for October delivery advanced 9.3 cents, or 1.2 percent, to $8.143 per million Btu at 12:21 p.m. on the New York Mercantile Exchange. Futures earlier rose 3.4 percent to $8.32.

The exchange is closed Sept. 1 because of the Labor Day holiday in the U.S. Electronic trading will be open.

``The markets are reacting as they should, there's some short covering before the long weekend,'' said Michael Rose, trading director at Angus Jackson Inc. in Fort Lauderdale, Florida. Short trades are those placed anticipating lower prices.

``Storms are lining up in the Atlantic like someone is giving away free lunch,'' he said.

Gustav pounded Jamaica with rain, flooding streets with water and mud, as Louisiana prepared for the system to strengthen into a hurricane. It may become the strongest storm to reach the Gulf since 2005, when hurricanes Katrina and Rita shut refineries and platforms, AccuWeather.com said on its Web site.

Crude oil also climbed as Gustav approached. The Gulf accounts for about 26 percent of U.S. oil supplies.

Crude Climbs

Crude oil for October delivery jumped $1.68, or 1.5 percent, to $117.27 a barrel in New York.

``Gustav will approach, intersect and impact the main energy infrastructure swath across the outer Continental Shelf'' in the Gulf, Manhattan-based Weather 2000 Inc. said in an outlook.

``Even if Gustav is only a Category 3 storm, that's pretty nasty,'' said Michael Schlacter, chief meteorologist at the forecaster.

Such a storm has winds of 111 (178 kilometers) to 130 miles per hour. Hurricane strength is rated on the five-category Saffir-Simpson scale. Winds in a Category 5 storm exceed 155 mph.

Gustav had sustained winds of 65 miles per hour as of 11 a.m. Miami time today and was centered near the western tip of Jamaica, 100 miles west-northwest of the capital, Kingston, the Miami-based U.S. National Hurricane Center said on its Web site. It is heading west-northwest at 8 mph.

Production Idled

Producers in the Gulf will idle output and evacuate platforms tomorrow as Gustav nears, according to Louisiana's Port Fourchon.

``It appears to be coming through the heart of oil and gas production,'' said Ted Falgout, the port's director. ``The length of the production cuts will depend on the severity of the storm.''

Behind Gustav is Tropical Storm Hanna, about 215 miles north of the Northern Leeward Islands and moving west-northwest at 12 mph. Hanna, with sustained winds near 50 mph, may become a hurricane by tomorrow, the center said.

Two tropical waves are moving west across the Atlantic, the center said.

Katrina formed over the Bahamas on Aug. 23, 2005, making landfall in southeast Louisiana on Aug. 29. Hurricane Rita, the most intense tropical cyclone ever observed in the Gulf, made landfall Sept. 24, 2005, at Sabine Pass near the border of Texas and Louisiana.

Katrina and Rita

The storms curtailed Gulf gas flow, prompting the fuel to touch $15.78 per million Btu on Dec. 13, 2005, the highest since gas began Nymex trading. Katrina, which reached Category 5, the strongest grade hurricane, closed 95 percent of offshore output in the Gulf.

The hurricane season runs through November with the peak time for storms between now to the end of September.

Royal Dutch Shell Plc shut some offshore operations, removing about 800 workers to shore before Gustav arrives and Anadarko Petroleum Corp. will idle offshore Gulf operations by Aug. 31.

Houston-based Transocean Inc., the largest offshore oil driller, evacuated about 400 workers from rigs in the Gulf. Another 1,500 will be moved before the storm arrives.

To contact the reporters on this story: Reg Curren in Calgary at rcurren@bloomberg.net.

Last Updated: August 29, 2008 12:32 EDT