The oil market's taking notice that Hurricane Gustav could be the first major storm to wreak havoc with Gulf of Mexico oil production areas in several years, and it should be clear by the weekend just how serious that threat could be.
"This could be the most significant storm in that area since Katrina and Rita" in 2005, said John Kilduff, M.F. Global senior vice president.
Oil prices are up today on both concern about Hurricane Gustav and on increasing geopolitical tension, as Russia formally recognized the breakaway Georgian regions. Gustav is a category one hurricane and could soon reach category two level. Natural gas futures were also up sharply.
Oil , though, is off its highs for the day, and GRZ Energy's Anthony Grisanti told CNBC's Rebecca Jarvis at the NYMEX that some models are showing that the hurricane could cross the Gulf south of the oil production areas, reducing the risk.
"I think the bottom's in for now. I don't see $115 (per barrel) being tested," said Kilduff, a CNBC contributor. "The storm situation may be serious enough to get us back over $120 and possibly maintaining that level."