By Matthew Robinson

LONDON (Reuters) - Oil prices dipped to below $109 a barrel on Wednesday, weighed down by slowing demand in the United States and other consuming nations and signs the U.S. oil sector would recover quickly from Hurricane Gustav.

U.S. crude CLc1 traded down 36 cents to settle at $109.35 a barrel by 6 p.m., after ending on Tuesday below its 200-day moving average, a key technical level, for the first time since May 2007. London Brent LCOc1 fell 28 cents to $108.06.

Prices have fallen by more than $6 since Friday after Hurricane Gustav proved to be less devastating than feared.

Initial checks on U.S. energy installations in the Gulf of Mexico showed little damage, and the Louisiana Offshore Oil Port -- the nation's only deepwater port -- was expected to resume operations in the next couple of days.

Companies closed 14 refineries and shut in all of the 1.3 million barrels per day of oil production in the Gulf at the peak of the storm's impact Monday. But by Wednesday two refineries had restarted and some offshore production was trickling back online.

Now that the storm has passed, analysts said, slowing oil demand in the United States and other consumer nations would continue to depress oil prices, which have dropped from a record of $147.27 set on July 11.

DEMAND DESTRUCTION

"It's the economy, economy, economy. Everyone's worried about demand destruction," said Robert Nunan, a risk management executive at Tokyo-based Mitsubishi Corp.