Oil futures were higher, continuing yesterday's three dollar rally as early damage reports of the damage caused by hurricane Katrina began to trickle through. At 10.28 am, October-dated Brent futures contracts were up 31 cents at 67.88 usd, within reach of yesterday's record 68.89 usd a barrel. Meanwhile, US benchmark October-dated contracts were up 51 cents at 70.32 usd, off yesterday's record of 70.85 usd, in pre-market deals. "Oil prices are higher as the extent of the damage is still unclear, and because of the uncertainty, are being led by the (gasoline and distillates) products," said Bache Financial broker Christopher Bellew. "IPE gasoil (UK gasoline equivalent) hit a fresh high this morning at 645.75 usd on worries over production" shortages, Bellew said. Oil prices rallied by 3 usd a barrel yesterday amid concerns that the damage caused by hurricane Katrina will cost billions in insurance claims and that US domestic production and refineries will take several months to recover. Prices look set to surge even higher if the effects of Katrina turn out to be anything like Hurricane Ivan last year, analysts said. "All of a sudden the 105 usd 'super-spike' predicted by Goldman Sachs in March which had been thought of as a prediction too far looks like becoming a possibility as strong demand, in particular by China and the US, and repeated production and refinery problems lead the price higher," Sucden analysts said.