LONDON, Aug 30: Oil prices surged to fresh historic peaks on Tuesday on supply concerns, amid uncertainty over the extent of damage to US production facilities caused by Hurricane Katrina.

New York’s main contract, light sweet crude for delivery in October, surged by $3.65 to reach an all-time high of $70.85 per barrel, beating the previous record $70.80 reached on Monday.

The contract stood at $70.50 around 1615 GMT, with oil prices now more than double the levels reached in 2003.

The price of Brent North Sea crude oil for delivery in October, meanwhile, rocketed by $4.02 to strike a record peak of $68.89 on Tuesday, smashing the previous high of $66.85 reached on August 15.

The contract later stood at $68.10 per barrel, up $3.23 from Friday’s close. There had been no trading of the contract on Monday due to a bank holiday.

“The advance of prices again today indicates that participants believe that there is at least a significant amount of damage” caused by Katrina, Fimat analyst Mike Fitzpatrick said.

When deadly Katrina slammed into the US Gulf Coast on Monday, it hit onshore refineries around the evacuated city of New Orleans, Louisiana. Katrina was later downgraded to a tropical storm after devastating Louisiana, Mississippi and Alabama.

According to US government data, Katrina has shut down an estimated 92 per cent of crude production and 83 per cent of natural gas output in the Gulf of Mexico — which accounts for a quarter of total US oil output.

“Previous to the storm there was a fairly tight supply and demand balance and these losses will be acutely felt,” Fitzpatrick added.

After the US government said on Monday that it could release strategic crude reserves to calm the market, the Organization of Petroleum Exporting Countries voiced concern about the soaring cost of oil.

“We are concerned that prices continue to go up beyond what fundamentals call for,” acting Opec Secretary-General Adnan Shihab-Eldin said during an energy conference in Oslo on Tuesday.

“Fundamentals do not justify the current price levels,” he added in reference to current supply and demand for global energy.—AFP