Fears grow that oil production may be shut off
Insurers are bracing themselves for the biggest storm losses in years as Hurricane Gustav has reportedly caused 96% of the oil production in the Gulf of Mexico to be shut off.
The price of oil could rise sharply in trading today after oil workers were taken to safety from their rigs.
Fears were growing last night that Gustav could intensify to become a Category Five hurricane, the highest classification of storm as it gets nearer to the coast.
The last time a hurricane of this intensity made landfall in the Gulf was in 2005, when Hurricane Katrina caused around £22bnof insured losses.
Neena Saith, catastrophe response manager at Risk Management Solutions, said Gustav was expected to hit oil platforms over the next few days.
She said: “The last time we had this level of disruption was in 2005. Gustav weakened to a Category 3 hurricane in Cuba but it will most likely be a Category 4 strength and possibly even Category 5.'”
Gustav has left behind a trail of devastation in the past few days, claiming at least 81 lives as it struck Cuba and tore across the Dominican Republic, Haiti and Jamaica.
