Bloomberg reports oil and natural gas companies have begun evacuating thousands of offshore workers in the Gulf of Mexico in preparation for Tropical Storm Gustav headed toward the region. Some suspect the storm could be the costliest since Hurricane Katrina hit the area in 2005.

One oil executive believes 50% of oil and gas production in the Gulf of Mexico could be shut in. Energy prices rose as the storm is projected to regain strength as it moves on a track toward Louisiana. The area is responsible for about 25% of all U.S. oil production and 15% of gas output.

Natural gas rose 1.7% to $8.415 per million BTUs in New York. Crude oil settled higher 1.6% to $118.11 a barrel at 2.22 PM.

From the Bull Pen: Bulls looking for a trade might see Exxon-Mobil (XOM) make a move for the $85 strike. Sell-stops can be set near $79.

From the Bear Cave: Bears can consider the “Hurricane Fade,” where prices are typically artificially elevated due to the media headlines. The oil ETF (USO) at $105 could also be interesting as it would mark a 50% retracement from the July high.