Oil up slightly as Hurricane Ike nears Texas

By Rebekah Kebede

NEW YORK (Reuters) - Oil inched higher on Friday as Hurricane Ike neared the Texas Coast, shuttering a quarter of U.S. crude oil and refinery production and threatening the nation's energy hub with a 20-foot (six-metre) wall of water.

The gains were tempered by mounting concerns that high energy costs and an economic slowdown were cutting deeply into global fuel demand -- worries that briefly had crude below the $100 mark for the first time since early April.

U.S. crude CLc1 rose 31 cents to settle at $101.18 a barrel, trading from $99.99 to $102.89 per barrel. London Brent LCOc1 fell 6 cents to $97.58 a barrel.

"When the range is tight, you can pretty much assume that both buyers and sellers are content with their positions, particularly on a Friday after a fairly precipitous sell-off and while staring down the barrel of a strong hurricane," said Mike Fitzpatrick, vice president at MF Global in New York.

Oil prices are down about 30 percent from a peak over $147 a barrel hit in mid-July, pulled lower by softening demand and a recent rebound in the U.S. dollar.

The U.S. dollar weakened on Friday due to worry over the future of the Lehman Brothers investment bank and a report showing a second month in a row of declining retail sales.

Ike is likely to come ashore late Friday or early Saturday as a Category 3 storm with winds of more than 111 mph (178 kph), according to the National Hurricane Centre.

Fourteen refineries -- 22 percent of total U.S. refining capacity -- have been shut ahead of Hurricane Ike. Meanwhile, nearly all of the crude oil and natural gas production in the Gulf of Mexico was idled due to the storm.