Katrina strengthened to a category 5 hurricane today and is heading for the city of New Orleans, where thousands of residents are boarding up buildings and fleeing the potentially catastrophic storm.
Officials in the city urged residents to evacuate and stranded tourists to shelter on at least the third floor of their hotels as Katrina threatened to make a second and possibly more deadly assault on the US coast after killing seven people in Florida.
"This hurricane has the potential to cause extreme damage and large loss of lives if they don't take action very soon," Max Mayfield, director of the US National Hurricane Center, told WSVN television in Miami.
Katrina grew into a Category 5 hurricane on the five-step Saffir-Simpson scale by 12.05pm Irish time, with winds of 260 kph capable of causing catastrophic damage. The storm was around 250 miles south-southeast of the mouth of the Mississippi River.
The hurricane center warned it could come ashore with a storm surge of up to 25 feet, and douse the Gulf coast with up to 15 inches of rain in some areas.
Katrina had begun a turn to the northwest that could see it roaring ashore somewhere between the Florida-Alabama border and Morgan City in Louisiana tomorrow morning, and taking a course through the heart of US Gulf of Mexico oil and gas production.
Computer models showed that New Orleans, much of which lies below sea level, could be in the storm's eye.
The last Category 5 to strike the area was Hurricane Camille in 1969. Camille just missed New Orleans but devastated large swaths of Louisiana and Alabama, and killed more than 400 people. Hurricane Andrew, which destroyed the city of Homestead south of Miami in 1992 and ranks as the costliest natural disaster in US history, was also a Category 5.
President George W. Bush declared an emergency in Louisiana, a measure that allows federal emergency assistance to be deployed.
The storm was larger and more powerful than when it hit Florida's southeast coast on Thursday, killing seven.
Insured losses from Katrina's first strike on US shores were estimated at $600 million to $2 billion by independent forecasting firms. That compared with an estimated $45 billion in total damages caused in 2004 by four powerful hurricanes that struck Florida in a six-week period.
US energy companies said US Gulf of Mexico crude oil output was cut by more than one-third yesterday as Hurricane Katrina appeared poised to charge through central production areas, much like Hurricane Ivan did last September.
The Gulf of Mexico is home to roughly a quarter of US domestic oil and gas output, and the storm's impact could well be felt at petrol station pumps by US motorists already struggling with soaring prices.