Gustav kills 59 in Caribbean,

By Horace Helps

KINGSTON (Reuters) - Tropical Storm Gustav hit Jamaica with near hurricane-force winds on Thursday after killing at least 59 people elsewhere in the Caribbean, and was on a path to reach New Orleans and the Gulf of Mexico oil fields as potentially a powerful hurricane.

As Gustav churned through the Caribbean, Tropical Storm Hanna formed in the Atlantic Ocean with 40-mph (65-kph) winds and took a track that could threaten the Bahamas and Florida, also next week, the U.S. National Hurricane Center 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 two days of gains as Gustav aimed deep into the heavy concentration of oil and natural gas platforms off Louisiana and Texas.

But crude price 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.

The seventh storm of a busy Atlantic hurricane season was 15 miles (25 km) east-northeast of Kingston, Jamaica, at 5 p.m. EDT (10 p.m. British time), the hurricane center 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.

POSSIBLE EVACUATIONS

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.