Oil Soars to Record as Hurricane Katrina Shuts U.S. Production Crude oil soared to a record above $70 a barrel in New York after Hurricane Katrina forced companies including Exxon Mobil Corp. and Chevron Corp. to evacuate rigs in the Gulf of Mexico, where 30 percent of U.S. oil is produced. Oil had its biggest gain in 29 months as Katrina, the U.S. Gulf coast's worst storm since 1969, disrupted production and headed for refineries that make as much as 15 percent of the nation's fuel. Hurricane Ivan last September cut the region's oil output by as much as a third. ``Damage similar to that caused by Ivan will push oil prices above $75,'' said A.F. Alhajji, an energy economist and associate professor of economics at Ohio Northern University. ``It took more than six months to restore production after Hurricane Ivan. Crude oil prices increased by more than $10 within a month.'' Crude oil for October delivery rose as much as $4.67, or 7.1 percent, to $70.80 a barrel in electronic after-hours trading on the New York Mercantile Exchange. The commodity retreated to $69.15 at 11:25 a.m. in London after the storm's strength was downgraded. Natural gas, heating oil and gasoline climbed to all- time highs today. Asian and European shares and U.S. stock futures indexes fell on concern rising energy costs will reduce profits and leave consumers with less money to spend. U.S. 10-year treasuries had the biggest gain in over a week. OPEC, Gas Oil has risen 59 percent this year as the Organization of Petroleum Exporting Countries and other producers failed to increase output enough to meet demand. Consumption in China, conflict in the Middle East and storms in the U.S. Gulf helped boost the price to records. Katrina is a Category 4 storm, the second-most severe on the Saffir-Simpson scale of hurricane strength. Category 4 hurricanes, with winds greater than 131 miles per hour (210 kilometers per hour) can blow down shrubs, trees and signs, destroy mobile homes and rip the roofs off smaller houses, according to the National Hurricane Center. It was earlier a Category 5 hurricane. Natural gas for September delivery gained as much as 23 percent to $12.07 per million British thermal units, the biggest one-day rise for 11 months. It was at $11.867 at 11:10 a.m. London time. The International Petroleum Exchange in London where the Brent futures contract is traded is closed today for a public holiday. Shell, Exxon Royal Dutch Shell Plc said it has shut 420,000 barrels of daily oil production in the Gulf because of Katrina, the most powerful hurricane poised to hit the U.S. since 1992. The Louisiana Offshore Oil Port, which handles about 11 percent of U.S. imports, closed Aug. 27 and has since halted all oil movements to shore. Exxon, the world's largest oil company, evacuated workers and shut about 50,000 barrels of daily oil production and 300 million cubic feet of gas, spokeswoman Susan Reeves said. The company removed 430 employees and contractors from its Gulf facilities last night, she said. Chevron, the second-largest U.S. oil company, didn't have figures immediately about the amount of oil and natural gas that will be shut, spokesman Matt Carmichael said. ``We are still doing the math,'' he said. Hurricane Ivan last September cut the region's oil output by as much as a third. ``The storm is more severe than we've thought,'' said Paul Sankey, senior oil analyst with Deutsche Bank Securities in New York. ``It's turned into a monster. The amount of lost production is equal to almost all the spare capacity in the world.'' State of Emergency A state of emergency has been declared in Louisiana and Mississippi. New Orleans, a city of 500,000 within a metropolitan area of 1.3 million, is being evacuated of all but essential personnel. Much of the city, 100 miles upriver from the Gulf, lies below sea level. Hurricane Katrina was centered about 90 miles (144 km) south of the mouth of the Mississippi River at midnight local time, the National Hurricane Center said in its most recent advisory on its Web site. The storm was moving northwest at 10 miles per hour. ``It's as bad as it can get,'' said Marshall Steeves, an oil analyst at Refco Inc. ``Hurricane Ivan came through almost a very similar track and did a tremendous amount of damage.'' Oil prices jumped 22 percent in the month after Hurricane Ivan, the third most costly in U.S. records, tore through the Gulf in September, toppling platforms and damaging underwater pipelines. PIN/Bloomberg