US petrol production now one-tenth of normal

ACCORDING to officials production of petrol in the US has fallen to a tenth of its usual rate following the devastation caused by Hurricane Katrina, prompting the price of crude oil to soar on the international market as the US government prepares to dip into its strategic reserves (normally only used in times of war) to ease the crisis.

Crude oil prices have hit levels unseen in real terms since 1980 - the year of the Iran-Iraq war and a year after the Iranian revolution choked off supply lines.

Prices fell by $1.67 a barrel to $67.80 yesterday on news Europe was riding to the rescue. Gasoline also eased. The price of oil shot past the $70 level earlier this week. But European oil will take at least 10 days to reach US shores and tanker space is in short supply, with many commercial ships under charter and crossing the Atlantic.