* Storm Gordon halts some energy production in U.S. Gulf
* Gordon to make U.S. landfall as hurricane
* Cushing crude stocks rose last week -traders, citing Genscape
* U.S. dollar index higher, weighing on oil futures (Updates with settlement prices, adds commentary)
By Stephanie Kelly
NEW YORK, Sept 4 (Reuters) - Oil prices were little changed on Tuesday, as energy infrastructure on the U.S. Gulf Coast braced for a hurricane, but gains were capped as a stronger dollar and report of rising stockpiles at the Cushing, Oklahoma hub weighed.
U.S. West Texas Intermediate (WTI) crude CLc1 futures rose 7 cents to settle at $69.87 a barrel after earlier hitting a session high of $71.40. U.S. markets were closed on Monday for Labor Day.
Brent crude LCOc1 , which traded on Monday, was ended 2 cents firmer to settle at $78.17 a barrel, down from a session high of $79.72.
Both benchmarks jumped earlier in the session as more oil producers pulled employees out of Tropical Storm Gordon's path and shut-in 9 percent of U.S. Gulf of Mexico oil and gas production on Tuesday. the storm, expected to make a nighttime landfall as a category 1 hurricane, shifted eastward, reducing its threat to major production areas and most Gulf Coast refineries.
Vessel traffic along the U.S. Gulf Coast was also under restrictions ahead of Gordon. Gulf of Mexico is home to 17 percent of U.S. crude oil production and 5 percent of natural gas output daily, according to the U.S. Energy Information Administration. On land, the Gulf Coast serves as a major U.S. refining hub.
Prices moved lower, however, as market participants saw the market as overbought.
"Initial reaction this morning appeared exaggerated as disruption to Gulf of Mexico production infrastructure isn't likely to extract a major amount of crude from the market," Jim Ritterbusch, president of Ritterbusch and Associates, said in a note. "The larger impact of the storm is apt to fall on Gulf coast refinery activity that could be affected by power outages."
Weighing on oil prices, Cushing, Oklahoma, crude inventories rose nearly 754,000 barrels from Aug. 24 to Friday, traders said, citing a report from market intelligence firm Genscape.
A rising U.S. dollar index .DXY also pushed crude futures lower. A stronger dollar makes greenback-denominated oil more expensive for holders of other currencies.
Global oil markets have tightened over the last month, pushing up Brent prices by more than 10 percent since the middle of August. Investors anticipate less supply from Iran as U.S. sanctions on Tehran begin to bite.
Harry Tchilinguirian, oil strategist at BNP Paribas (PA:BNPP), warned of "supply issues" into 2019.
"Crude oil export losses from Iran due to U.S. sanctions, production decline in Venezuela and episodic outages in Libya are unlikely to be offset entirely by corresponding rises in OPEC+ production," Tchilinguirian said.
BNP Paribas expects Brent to average $79 in 2019.