US Treasury Secretary John Snow said the economy would suffer a hit in the year's second half, after the Congressional Budget Office said Wednesday that Katrina would shave half to one percentage point off growth.

But Snow, announcing tax relief for disaster victims, added: "The fact that our underlying economic fundamentals are so solid enhances our ability to deal with this disaster."

Port executives in the ruined city of New Orleans said workers were straining to get normal operations back up at the country's biggest grain export hub within a week.

Energy Secretary Samuel Bodman said the Gulf Coast has "all but four refineries now back on stream and functioning", after at least eight were knocked out entirely in the trail of devastation left by Katrina.

The quartet can process between 700,000 and a million barrels of oil day, which represents four to five percent of total US refining capacity.

In Katrina's immediate wake, up to 20 percent of US refinery capacity was offline with refineries on the Gulf of Mexico coast suffering wind or flood damage, or loss of power.

That strangled supplies of vital crude products such as gasoline to other parts of the United States, driving pump prices to new highs and triggering a bout of panic buying by drivers.

Crude oil production in the Gulf is also slowly getting back to normal after grinding to a virtual halt when hundreds of rigs and platforms were evacuated ahead of Katrina.

Only 20 percent of platforms and 12 percent of rigs remain unmanned, the federal Minerals Management Service said Wednesday.

Flows from pipelines that deliver gasoline and other refined products from the Gulf Coast to the rest of the United States are "now operating at 100 percent", Bodman said.

The United States is releasing 30 million barrels of oil from its Strategic Petroleum Reserve, and its partners in the International Energy Agency are furnishing another 30 million barrels.

The IEA board will meet on September 15 to take stock of the oil markets, which have been calmed by the emergency release after prices shot up in Katrina's immediate aftermath.

"We'll be there, and if more is needed, I expect that we would be reacting favourably," Bodman told the CNBC network.

Gary LaGrange, chief executive of the Port of New Orleans, said commercial shipping would soon return to the flooded city's docks.

The port, the fifth-biggest in the United States in terms of cargo traffic, is now seeing 15 to 25 tankers and grain ships passing through daily.

"They're going beyond the port of New Orleans, up river to the grain elevators which were less damaged than the port of New Orleans and to the refineries which were less damaged," LaGrange said.

Other than military and humanitarian aid vessels, the first commercial ships to dock in the port itself will be tankers carrying steel in the coming days.

"That will be the first commercial activity in the port of New Orleans since our unwanted visitor came last Monday," LaGrange said.

New Orleans, which lies at the mouth of the Mississippi River, handles just over 60 percent of US exports of corn and soybeans.

Grain barges are limited to transiting on the Lower Mississippi only in daylight hours after Katrina destroyed 90 percent of night-time navigational aids and dumped sediment on the riverbed.

But activity is picking up, LaGrange said.

"It's critical because it's harvest season and the farmers have to get the grain out of here. In no uncertain terms ... the grain is flowing by my office, headed for Asia."

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