Aug. 29 (Bloomberg) -- 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 shut operations in the Gulf of Mexico.

Oil had its biggest gain in 29 months while gasoline and heating oil reached records as Katrina, one of the most powerful storms to hit the U.S., crossed the Gulf, source of 30 percent of the country's oil output and 24 percent of its natural gas.

``Forecasters are saying Katrina could do more energy damage than any storm in recent years,'' Jason Schenker, an economist with Wachovia Corp. in Charlotte, North Carolina, said before the start of trading. ``It's not just that there's going to be outages for the next couple of days. With shutdowns and damage at platforms and refineries, the bullish impact could be felt for the rest of the year.''

Crude oil for October delivery rose as much as $4.67, or 7 percent, to $70.80 a barrel in electronic after-hours trading on the New York Mercantile Exchange. It was at $69.86 a barrel at 7:55 a.m. Singapore time.

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 $11.569 at 8:04 a.m. Singapore time.

Japanese stocks dropped, led by exporters such as Sony Corp., after an industry report showed a bigger-than-expected drop in U.S. consumer confidence and oil prices surged.

Shell

Royal Dutch Shell Plc said it has shut 420,000 barrels of daily oil production in the Gulf because of Katrina. 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 Mobil Corp., 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, did not 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.

State of Emergency

Katrina is a Category-5 storm, the most severe on the Saffir- Simpson scale of hurricane strength. It would be only the third storm of that magnitude to hit the U.S. since the government began keeping storm records.

States of emergency have 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.

Katrina was centered about 150 miles (240 km) south of the mouth of the Mississippi River at 4 p.m. local time, the National Hurricane Center said in its most recent advisory on its Web site. The storm was moving northwest at 13 mph, and is likely to make land early Monday local time, the center said.

``The storm is more severe than we've thought; it's turned into a monster,'' said Paul Sankey, senior oil analyst with Deutsche Bank Securities in New York. ``The amount of lost production is equal to almost all the spare capacity in the world.''

Ivan

Oil prices jumped 22 percent in the month after Hurricane Ivan, the third most costly hurricane in U.S. records, tore through the Gulf last September, toppling platforms and damaging underwater pipelines.

Lost production in the Gulf because of Ivan peaked Sept. 16 at 1.4 million barrels of oil daily and 6.5 billion cubic feet of gas, according to the U.S. Minerals Management Service, which oversees offshore production. Shut production from Katrina could match those numbers, Sankey said.

U.S. supplies of refined products, including gasoline, jet fuel and diesel, may also decline as refineries near the path of the storm also shut down. ConocoPhillips, the biggest U.S. refining company, shut its Alliance refinery south of New Orleans. Chevron Corp. and Valero Energy Corp. also shut refineries and evacuated staff.

Gasoline for September delivery rose as much as 20.31 cents, or 10.5 percent, to $2.13 a gallon in after-hours electronic trading. It was last at $2.1150 a gallon.

Heating oil for September delivery rose as much as 16.94 cents, or 9.2 percent, to $2.0060 a gallon. It was last at $1.9970.

To contact the reporter on this story: Gavin Evans in Wellington, New Zealand at gavinevans@bloomberg.net

Last Updated: August 28, 2005 20:36 EDT