Opec admitted that it was concerned about the persistently high price of oil yesterday as the United States braced itself for potential damage to oil production in the Gulf of Mexico, which could be in the path of Hurricane Katrina.
As the hurricane was upgraded to a rare category five storm, the insurance industry was also preparing to count the cost of damage caused by estimated 175mph winds.
The last category five hurricane to hit America was Hurricane Andrew in 1992, which cost insurers' $21bn (£11bn) - the worse storm damage in history. Fears that damage to rigs could send oil prices rising even further kept the price of crude above $67 a barrel on Friday.
The record high prices prompted Opec oil producers to admit yesterday that they were looking at "various options" for their September meeting to help take the pressure off prices.
"We are becoming increasingly concerned at the continuing high level of oil prices, which does not properly reflect the underlying fundamentals of the market," said Sheikh Ahmad al-Fahd al-Sabah in a statement published by Kuwait's state-run news agency. The Opec president, also Kuwait's oil minister, said that oil supplies were plentiful and that during the third quarter of 2005, Opec had been producing 1.5 million barrels a day more than was needed.
Any hit to oil production in the US caused by the hurricane could make prices rise even further and may begin to become apparent today, when the storm is expected to hit the US shores. A third of production has already been stopped.
The Lloyd's of London insurance market said it was "monitoring the situation".
