Gustav kills 23; New Orleans makes evacuation plan

Gustav killed 15 people on Haiti's deforested southern peninsula, where it dumped 12 inches or more of rain. A landslide buried eight people, including a mother and six of her children, in the neighboring Dominican Republic.

Gustav weakened to a tropical storm over Haiti, but was expected to become a hurricane again as early as Thursday over the warm Caribbean waters between Cuba and Jamaica. Its expected track pointed directly at the Cayman Islands, an offshore banking center where residents boarded up homes and stocked up on emergency supplies.

By Labor Day, Gustav could make landfall anywhere from south Texas to the Florida panhandle, and hurricane experts said everyone in between should be concerned.

"We know it's going to head into the Gulf. After that, we're not sure," said meteorologist Rebecca Waddington at the National Hurricane Center in Miami. "For that reason, everyone in the Gulf needs to be monitoring the storm."

New Orleans began planning a possible mandatory evacuation, hoping to prevent the chaos it saw after Hurricane Katrina struck three years ago Friday. Mayor Ray Nagin left the Democratic National Convention in Denver to help the city prepare.

Oil prices spiked more than $2 to close above $118 a barrel, rising for a third day on fears that Gustav--like Katrina and Rita--could damage the Gulf Coast energy infrastructure, home to 15 percent of the nation's natural gas output, a quarter of its oil production and nearly half its refining capacity.

Royal Dutch Shell PLC said it was evacuating 300 people from rigs Wednesday, and other producers were doing the same. Transocean Inc., the world's largest offshore drilling contractor, said all 11 of its Gulf rigs were pulling up and securing drill pipe and other underwater equipment as a precaution.

Any damage to the oil infrastructure could send U.S. pump prices spiking, possibly before the busy Labor Day weekend.

"A bad storm churning in the Gulf could be a nightmare scenario," said Phil Flynn, an analyst at Alaron Trading Corp. in Chicago. "We might see oil prices spike $5 to $8 if it really rips into platforms."