Oil tumbles over 1 pct as Hurricane Dean moves west

SYDNEY, Aug 20 (Reuters) Oil prices tumbled over 1 percent in early trade on Monday as powerful Hurricane Dean appeared unlikely to plough through key production and refining centres in the U.S. Gulf.

U.S. crude fell 73 cents, or 1.01 percent, to .25 a barrel in Globex electronic trading by 2350 GMT. London Brent crude fell 74 cents to .70.

''Oil prices are falling because Hurricane Dean is heading away from the U.S. oil centres. That's the main factor driving down prices,'' said David Moore, a commodities analyst at the Commonwealth Bank of Australia.

Hurricane Dean, a Category 4 storm, pounded Jamaica's southern coast on Sunday, littering the capital of Kingston with fallen trees and windblown roofs after killing six people earlier on its run through the Carribbean.

The U.S. National Hurricane Center forecast Dean would spare the U.S. Gulf Coast, which accounts for about a third of U.S. oil production, but could strengthen into a rare and potentially catastrophic Category 5 and slam into Mexico's Yucatan Peninsula.

Still, U.S. companies remain wary of a sudden change in the track forecast for Dean, which the U.S. National Hurricane Center called an ''extremely dangerous'' category 4 storm packing winds of 145 miles per hour (230 km per hour).

''We are prepared for full evacuation if the hurricane turns, but otherwise we continue producing,'' a spokesman from BP Plc said.

About 23,000 barrels per day (bpd) in oil production and 54 million cubic feet of natural gas output were shut-in as a precaution due to the storm, according to the U.S. Minerals Management Service.

Oil's price dive on Monday has partially erased previous session's gains, which saw oil closing 98 cents higher at .98 a barrel after the U.S. Federal Reserve cut a key interest rate to calm financial markets and on concerns that Hurricane Dean could hit Gulf of Mexico oil facilities like devastating hurricanes Katrina and Rita in 2005.

Moore said he did not expect oil prices to fall much lower as global oil supplies remain tight, adding the Fed move also could alleviate fears about a sharp slowdown in the U.S.

economy and energy consumption.

U.S. crude prices have fallen more than 9.5 percent from its Aug. 1 record high of .77.

Markets have been hit by fears of financial instability after troubles with risky U.S. mortgages and a credit squeeze that had already prompted central banks, including the Fed, to pour money into the financial system.

Reuters CS VP0645