BP yesterday warned that Hurricanes Katrina and Rita may knock more than £400 million off profits in the third quarter of the year.
The oil giant, which announced first-half profits of £ 6 billion in July - or £1.4 million an hour - said trading conditions for the three months to the end of September were "significantly impacted" by the hurricanes and their aftermath.
While production is expected to be lower than the previous quarter, BP said the average Brent crude oil price achieved during the last three months was up by $10 a barrel to $61.63.
BP warned it was now unlikely to meet its 2005 production goal of between 4.1 million and 4.2 million barrels of oil equivalent per day.
Stripping out the impact of the weather, BP said its production efforts had been in line with expectations.
The company lost oil and gas production from the Gulf of Mexico and there were further costs due to damage, clean-up and repairs.
Activity was down at its Texas City refinery, where there was an explosion in March which killed 15 workers. BP also lost output to planned maintenance, mainly in the North Sea, which, along with the Gulf of Mexico, represents some of the highest margins for the company.
BP added it would incur costs of around £57 million to secure and repair its massive Thunder Horse platform in the Gulf of Mexico, which was badly damaged by Hurricane Dennis.
As hurricanes Katrina and Rita swept through the Gulf of Mexico, oil rigs were damaged, refineries flooded and production shut down.
BP predicted that daily output for the third quarter was likely to be around 3.8 million barrels, down from 4.1 million barrels in the second quarter.
While the storms damaged production, they also sent oil prices to a record high of $70.85 a barrel.
Before the statement, analysts were forecasting pretax profits of £17.7 billion, compared with £8.7 billion last year.
Meanwhile insurance group Zurich Financial Services estimated claims following Katrina would cost it in the region of £342 million.
It said the provisional figure was less than the £450 million to £500 million claimed after the September 11 attacks in New York.
And it added that although the final amount could change, the cost of the Gulf of Mexico storm was expected to be within plans made for the hurricane season.
A Zurich spokesman said: "It is a figure that we can manage well and it is not a shocking figure. It is within the plan we had for the year.
"We have to make contingencies for hurricanes every year and it is not a figure outside of that."
Last month, Lloyds of London estimated its losses would be £1.4 billion.
Among other European reinsurers, Swiss Re recently doubled its estimate of potential losses from Katrina, warning it expects claims in the region of £650 million.
Some analysts believe the total damage could cost the insurance industry around £35 billion.
