Aug. 29 (Bloomberg) -- Crude oil surged, at one point reaching a record $70.80 a barrel in New York, after Hurricane Katrina forced companies to evacuate platforms in the Gulf of Mexico, where 30 percent of U.S. oil is produced.

Oil jumped as much as $4.67, or 7.1 percent, the biggest increase in 29 months. Natural gas, heating oil and gasoline climbed to all-time highs as well.

Investors are concerned Katrina, the fiercest storm to strike the U.S. Gulf coast since 1969, will rupture pipelines, rip rigs from their moorings and disrupt production for weeks. Hurricane Ivan last September cut the region's oil output by as much as 1.4 million barrels a day. The U.S. produces 5.3 million barrels of crude oil a day.

``There is a long list of production and refineries out because of the hurricane,'' said Tom Bentz, an oil broker at BNP Paribas Commodity Futures Inc. in New York. ``The course is similar to what we saw with Ivan last year, which hit production for a long time.''

Crude oil for October delivery rose $2.57, or 3.9 percent, to $68.70 a barrel at 11:17 a.m. on the New York Mercantile Exchange. Prices are 59 percent higher than a year ago.

Natural Gas

Nymex declared force majeure on deliveries of natural gas sold under the August futures contract after Katrina forced the Henry Hub in Louisiana to shut. Force majeure allows producers to avoid penalties for failing to deliver supplies because of unforeseen events. Futures contracts settled on the exchange are delivered to the Henry Hub.

Natural gas for September delivery jumped $1.828, or 19 percent, to $11.62 per million British thermal units in New York. Futures touched $12.07, the highest since trading began in 1990. Prices have more than doubled in the past year.

``Natural gas is the real worry,'' said Bill O'Grady, assistant director of market analysis at A.G. Edwards & Sons in St. Louis. ``Unfortunately we can't import the missing production. This is largely a domestic market.''

Katrina had sustained winds near 125 miles per hour (201 kph), the National Hurricane Center said at 10 a.m. local time. The hurricane's center was about 35 miles (56 kilometers) east of New Orleans. Katrina was moving north at about 16 mph, the Miami-based center said.

Strategic Reserve

The U.S. filled its Strategic Petroleum Reserve, the nation's emergency stockpile of crude oil, to the 700 million- barrel level ordered by President George W. Bush after the Sept. 11 terrorist attacks. The Energy Department loaned some oil to refiners whose supply was disrupted by Ivan.

The government is prepared to tap its emergency oil reserve to assist energy producers and refiners in the path of Katrina, a department spokesman said. No companies have yet requested supplies from the stockpile, spokesman Craig Stevens said.

U.S. crude-oil supplies jumped 1.9 million barrels in the week ended Aug. 19, the fourth-straight increase, to 322.9 million, according to an Energy Department report on Aug. 24. Stockpiles are more than 10 percent higher than a year ago.

``The biggest impact may be damage to the port facilities south of New Orleans,'' said Adam Sieminski, chief energy economist at Deutsche Bank AG in New York. ``We have no way of knowing now how badly they are damaged.''

Louisiana Oil Port

The Louisiana Offshore Oil Port, the biggest U.S. oil import terminal, stopped unloading tankers on Aug. 28. The port is 20 miles off the coast and handles about 1 million barrels of crude oil a day, or 11 percent of U.S. imports. LOOP stopped making pipeline shipments to refineries from its onshore facilities yesterday.

Port Fourchon, about 50 miles south of New Orleans, is the hub for three-quarters of support services to the Gulf's deepwater oil and gas facilities and is the land base for the offshore oil port.

U.S. supplies of refined products, including gasoline, jet fuel and diesel, may also decline as refineries near the path of the storm shut.

Katrina forced the shutdown of at least seven oil refineries near the Gulf in Louisiana and Mississippi. The shut refineries have a combined crude-oil processing capacity of about 1.54 million barrels a day, or 9 percent of total U.S. capacity.

``The coastal region from Louisiana to Texas accounts for 50 percent of refinery capacity in the U.S., so if some platforms close down, oil could rise five or ten dollars more,'' said Jean-Charles Lacoste, an analyst with Calyon, the securities arm of Credit Agricole SA, France's biggest bank.

Gasoline

Gasoline for September delivery jumped 17.31 cents, or 9 percent, to $2.10 a gallon in New York. Futures touched $2.1606, the highest since trading began in 1984. Prices are 78 percent higher than a year ago.

Regular-grade gasoline, averaged nationwide, rose 0.2 cent to $2.603 a gallon on Aug. 26, according to data released today by the AAA, formerly the American Automobile Association. Prices averaged a record $2.614 a gallon on Aug. 19. Pump prices are 39 percent higher than a year ago.

Heating oil for September delivery climbed 9.84 cents, or 5.4 percent, to $1.935 a gallon. Futures surged to $2.0137, the highest in 27 years of trading on the exchange. Heating oil is 69 percent higher than a year ago.

Refiner Incentives

``Refineries that are open have every incentive to get as much fuel as they can on the market,'' Sieminski said. ``There could be headaches as they try to get substitutes for the sweet crude oil that comes from the Gulf.''

Much of the oil produced in the Gulf is sweet, or low in sulfur. Many refiners are unable to process high-sulfur grades and seek sweet grades that yield more diesel and gasoline.

The profit margin for turning a barrel of crude oil into heating oil and gasoline is $15.57, based on futures prices in New York. That is up 30 percent from Aug. 26 and more than double a year ago.

The International Petroleum Exchange in London, where the Brent futures contract is traded, is closed today for a public holiday.

To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net.

Last Updated: August 29, 2005 11:44 EDT