$6-12 bn insured losses from Gustav: Expert

WASHINGTON: Hurricane Gustav will result in up to $12 billion in insured losses and a long-term five percent cut to oil and natural gas production in the US Gulf Coast region, a US risk modeler said on Monday.

Eqecat Inc, an Oakland, California-based specialist in extreme risk modeling, said that losses from the storm, which swept ashore midday on Monday southwest of New Orleans, would range from six to 12 billion dollars, mostly focused in Louisiana.

Aside from wind and water damage to commercial and residential structures, the estimate includes business operating losses due to shutdowns and a surge in costs of supplies.

"In addition, production of crude oil and natural gas offshore in the US Gulf of Mexico will be impacted by asset damage and disruption," Eqecat said in a statement.

It said it expects oil and natural gas production capacity to be cut back by about five percent for the next year due to the storm.

The coastal region from Texas to Alabama is produces about one-quarter of total US oil production and is the center of the country's refining industry.