New Orleans is bracing itself as one of the strongest hurricanes ever to hit the US surges towards the city.
Hundreds of thousands of people have fled the low-lying southern city, or taken shelter on higher ground, amid fears of major flooding.
Although the storm has been downgraded from category five to four, sustained winds were still reaching 155mph (250km/h) as it reached the coast.
Hurricane Katrina made landfall over Grand Isle at about 0600 (1000 GMT).
Winds of up to 71mph (114km/h) have already been recorded in New Orleans.
Mayor Ray Nagin has said he believed 80% of the city's 485,000 residents have heeded his order for a mandatory evacuation of the city - which sits some 6ft (2m) below sea level.
The post-hurricane surge could reach 28ft (8.5m), toppling the barriers that protect the city and its historic French Quarter, he warned.
Highways were jammed on Sunday as residents fled. Those unable or unwilling to leave spent the night in shelters - including the 77,000-seat Superdome stadium, home of the NFL's New Orleans Saints. "We are facing the storm that most of us have feared," Mayor Nagin said. "This is a once in a lifetime event."
A series of barriers and pumps protect the bowl-shaped city from the Mississippi River on one side, and Lake Pontchartrain on the other.
Experts fear the city's defences could be overwhelmed by floodwaters, inundating New Orleans with chemicals from refineries, and human waste from damaged septic systems.
There was some hope though, as the storm approached, that the worst of the hurricane might not directly hit the city. Forecasters said the storm had turned slightly eastward, which would put the weaker side of the hurricane over New Orleans.
The BBC's Alistair Leithead in New Orleans says many people have headed to hotels in higher areas.
Businesses and homes have been boarded up and sandbags stacked up in doorways.
In the Gulf of Mexico, oil production has been hit, with capacity of over 650,000 barrels per day closed down, along with seven refineries and a huge offshore terminal.
In Asian trading on Monday, oil prices jumped nearly $5 a barrel to touch a high of $70.80.
Hundreds of thousands of people have fled the low-lying southern city, or taken shelter on higher ground, amid fears of major flooding.
Although the storm has been downgraded from category five to four, sustained winds were still reaching 155mph (250km/h) as it reached the coast.
Hurricane Katrina made landfall over Grand Isle at about 0600 (1000 GMT).
Winds of up to 71mph (114km/h) have already been recorded in New Orleans.
Mayor Ray Nagin has said he believed 80% of the city's 485,000 residents have heeded his order for a mandatory evacuation of the city - which sits some 6ft (2m) below sea level.
The post-hurricane surge could reach 28ft (8.5m), toppling the barriers that protect the city and its historic French Quarter, he warned.
Highways were jammed on Sunday as residents fled. Those unable or unwilling to leave spent the night in shelters - including the 77,000-seat Superdome stadium, home of the NFL's New Orleans Saints. "We are facing the storm that most of us have feared," Mayor Nagin said. "This is a once in a lifetime event."
A series of barriers and pumps protect the bowl-shaped city from the Mississippi River on one side, and Lake Pontchartrain on the other.
Experts fear the city's defences could be overwhelmed by floodwaters, inundating New Orleans with chemicals from refineries, and human waste from damaged septic systems.
There was some hope though, as the storm approached, that the worst of the hurricane might not directly hit the city. Forecasters said the storm had turned slightly eastward, which would put the weaker side of the hurricane over New Orleans.
The BBC's Alistair Leithead in New Orleans says many people have headed to hotels in higher areas.
Businesses and homes have been boarded up and sandbags stacked up in doorways.
In the Gulf of Mexico, oil production has been hit, with capacity of over 650,000 barrels per day closed down, along with seven refineries and a huge offshore terminal.
In Asian trading on Monday, oil prices jumped nearly $5 a barrel to touch a high of $70.80.
