Hurricane Gustav sent strong winds and lashing rains into New Orleans early yesterday, but the storm lost some of its power and was expected to move ashore to the west, sparing the city its full force.

Gustav weakened to a Category 2 hurricane shortly before making landfall, although it was already pounding Louisiana?s coastal areas with torrential rain and hurricane force winds. US crude oil futures slipped to below $114 a barrel on Monday morning as fears of major damage to oil facilities in the Gulf of Mexico eased. Oil companies had shut down nearly all production in the region, which normally pumps a quarter of US oil output and 15 % of its natural gas, and prices had hit more than $118 per barrel in a special trading session on Sunday.

Nearly 2 million people fled the Gulf Coast in one of the biggest evacuations in US history and only 10,000 were believed to have remained in New Orleans. More than 11 million residents in five US states were threatened by the storm.

US forecasters said Gustav was carrying maximum sustained winds of around 110 mph (175 kph), making it a Category 2 storm on the five-step Saffir-Simpson scale. At 1300 GMT, it was 20 miles (32 km) southwest of Port Fourchon, La., a key logistical support center for offshore oil rigs, and about 80 miles (125 km) southwest of New Orleans.

In the city, devastated by the flood waters from Hurricane Katrina three years ago, residents on talk radio reported some power outages, but also relief that the storm seemed to be less destructive than originally feared. ?It looks as though it is far less than we had expected but we are just beginning to see the full force of the hurricane,? said David Blake, a talk show host.

Hurricane Gustav also took center stage in US politics as Republicans prepared to open their convention yesterday to nominate presidential candidate John McCain with a bare-bones program stripped of the usual pomp and circumstance.

The US National Hurricane Center said Gustav was still likely to toss up ?an extremely dangerous storm surge? of up to 14 feet (4.3 meters) that could test the holding power of rebuilt levees that failed during Hurricane Katrina.

Hurricane Katrina brought a 28-foot (8.5 meter) storm surge that burst levees on August 29, 2005 and flooded some 80% of New Orleans, which sits partly below sea level. The city degenerated into chaos as stranded storm victims waited days for government rescue and law and order collapsed.

Police and several thousand national guard troops patrolled the empty city, sometimes in convoys of Humvees, as a curfew went into effect in a bid to prevent looting.

It was expected to swamp parts of Louisiana, Mississippi, Arkansas and Texas with up to 12 inches (30 cm) of rain and 20 inches (50 cm) in some small areas. Isolated tornadoes were also possible.

<B>Fears of another Katrina</B>

Gustav?s approach had stirred uneasy comparisons to Katrina, the most costly hurricane in US history, which killed some 1,500 people and caused over $80 billion in damage almost exactly three years ago.

President George W. Bush, who was criticized for the slow relief efforts after Katrina, canceled his appearance at the Republican convention as scheduled instead a visit to Texas on Monday to oversee emergency response effort.

McCain went to Gulf on Sunday to survey preparations and ordered political speeches cancelled yesterday for his nominating convention, apparently concerned that television images of a choreographed Republican celebration while the storm was hitting Louisiana would be seen as out of touch.

After accusations of botching Katrina relief efforts, the government lined up trains and hundreds of buses to evacuate 30,000 people who could not leave on their own and Nagin said 15,000 had been removed from the city, including hundreds in wheelchairs.

Flights from New Orleans and other Gulf Coast cities were cancelled yesterday as the storm bore down on the region.

Residents boarded up the windows of their shops and homes before leaving town, while others hunkered down as ?hold-outs? with stockpiled food, water and shotguns to ward off looters.

HURRICANE POLITICS

<B>McCain and Obama wrestle to show compassion</B>

Presidential rivals John McCain and Barack Obama wrestled with the political risks of another storm bearing down on New Orleans, three years after Hurricane Katrina drowned the city ? and devastated President George W. Bush?s legacy.

The approach of Hurricane Gustav forced a hasty curtailment of the Republican convention?s opening-day schedule on Monday and presented an unpredictable series of political challenges for the White House candidates.

Republican McCain and Obama, a Democrat who accepted his party?s nomination last Thursday, searched for the best ways to show compassion and action in the face of the impending storm while trying not to look like political opportunists.

For both candidates, Gustav could present a dangerous brush with hurricane politics.

?It?s a very fine line to walk. So much of politics is gesture and symbol, and you can easily be seen as overdoing it ? or not doing enough,? said Bruce Buchanan, a political science professor at the University of Texas. ?They can?t act like nothing is happening, but it?s easy to go over the top.?

McCain, fearing televised images of the usual convention activities and celebrations would be inappropriate, ordered the suspension of most of the opening day?s schedule yesterday. ?Of course this is a time when we have to do away with most of our party politics,? McCain told reporters in St. Paul, Minnesota, via satellite on Sunday from St. Louis, Missouri. The storm?s approach almost exactly three years after Katrina hit New Orleans conjured up reminders of the failed response to that disaster, which left a permanent scar on Bush?s legacy and hastened his slide in popularity.

The opening-day changes wiped out planned appearances by Bush and Vice President Dick Cheney ? a relief to some Republicans worried about reinforcing Obama?s efforts to link McCain and the unpopular president.

McCain visited a hurricane command center in Mississippi before leaving the storm zone, and his campaign avoided any discussion of political fallout.

?We don?t have the luxury of trying to evaluate the politics of this situation,? McCain?s campaign manager Rick Davis told reporters .

For McCain, an Arizona senator, a strong response and a smooth recovery on the Gulf Coast could send a message he would lead a Republican Party with a more responsive and competent approach to national crises than the Bush administration had shown.