Oil prices hit new record highs after crossing 70 usd a barrel in Asian trading hours as Hurricane Katrina threatened the crude-producing Gulf of Mexico With the psychological barrier now breached, some analysts said prices could now aim for 80 usd a barrel -- a level economists fear could severely dent consumer demand and clip business activity New York's main contract, light sweet crude for delivery in October, touched a high of 70.80 usd and was trading at 69.95 usd at 12 noon (0400 GMT) here, up 3.82 usd from its close of 66.13 usd in the US Friday "It seems to be a very crazy market," said Tetsu Emori, chief commodities strategist at Mitsui Bussan Futures in Tokyo. "People worry about gasoline and crude oil supply." Emori said the market will await the actual impact of the hurricane on production, but he said he believes 70 usd oil may not be sustainable because the US summer holidays are now drawing to a close, reducing gasoline demand "Seventy dollars is completely far away from the fundamentals," he said. "It's quite difficult to sustain." But Dariusz Kowalczyk, a Hong Kong-based investment strategist at CFC Seymour Securities, said he fears that the impact will be longer-lasting as damage to offshore oil rigs and onshore refineries would take time to repair He cited weather forecasts that Katrina, one of the most powerful Atlantic storms on record, would bear down on the Louisiana port, which handles 11 pct of US crude imports, or 1 mln barrels of oil a day Kowalczyk compared Katrina to Hurricane Ivan, which pummelled the US Gulf Coast in September last year, causing widespread damage to the region's oil production infrastructure, leading to a 22 pct spike in prices "The similarity with Katrina is so strong that the market really got nervous, so prices soared this morning," Kowalczyk said "We are still in a very bullish market," he said, adding that it is possible prices could even hit 80 usd a barrel "I think it will be a more sustained move higher," he said. "There is room for significant volatility in the days ahead." He pointed out that the February futures contract on the New York Mercantile Exchange has struck 71.87 usd a barrel -- the highest level for any contract and an indication of where the prices could go Gasoline prices in particular have shot up 3 pct from Friday's close -- a worrying trend because of its direct impact on US consumers, he said He said reports from the US showing consumer sentiment already sank in late August indicate that higher oil prices could have started to restrain all-important spending by US buyers The consumer sentiment index fell to 89.1 in late August from 96.5 in July and 92.7 in early August to its lowest level since May, a University of Michigan survey showed But a dip in US consumer sentiment could also be positive for the market because it will help bring down oil prices, which have been driven partly by soaring demand in the world's biggest economy, he said Kowalczyk also said the standoff over Iran's nuclear fuel work is another issue to watch, because any move toward sanctions could disrupt crude supplies from that oil-producing country "There is a lot of risks unrelated to global demand for oil such as supply reductions due to the hurricane and Iran situation," he said Economists said the higher oil prices will put the brakes on Asia's growth momentum, but agreed that the impact will be cushioned by other factors "It does represent the biggest cloud on the economic outlook," said David Cohen, a Singapore-based regional economist with Action Economics