Katrina set to raise oil prices

Katrina has caused widespread damage in the Gulf of Mexico

Oil prices are likely to rise further this week after Hurricane Katrina caused producers in the Gulf of Mexico to halt production at the weekend.

At least 563,000 barrels of daily crude have been lost in the region since rigs and other facilities were shut down and evacuated on Saturday.

The Gulf of Mexico produces between 20% and 25% of oil consumed in the US.

Oil prices touched a fresh record high of $68 a barrel last week, as Hurricane Katrina approached the region.

US warnings of reduced petrol stocks, and China's continuing sky-high oil consumption are also continuing to put upward pressure on global oil prices.

Consumer impact

ExxonMobil, Shell and Total were among the oil firms to have closed their Gulf of Mexico facilities.

While some sites have been shut completely, others have maintained a skeleton staff. Gas facilities have been equally affected.

There is evidence that the continuing high price of oil and its knock-on effect on petrol costs are starting to hurt consumers.

A reported drop in US consumer sentiment in August was blamed on high prices at gas stations.