An aerial view from the helicopter of Alberta Premier Rachel Notley shows smoke rising from raging wildfires which caused the mandatory evacuation of Fort McMurray, Alberta, Canada, May 4, 2016. [Photo/Agencies]

GREGOIRE LAKE, Alberta - A massive wildfire that has forced the evacuation of all 88,000 people in the western Canadian oil city of Fort McMurray and burned down 1,600 structures has the potential to destroy much of the town, authorities said on Wednesday.

With a few neighborhoods already in ruins, worsening fire conditions Wednesday pushed walls of flames towards thousands of more homes in the northeastern Alberta town, in the heart of Canada's oil sands region.

Authorities said there had been no known casualties from the blaze itself, but fatalities were reported in at least one car crash among the evacuees. Thousands bunked down in arenas, hockey rinks and oil work camps, often short on fuel and food.

Crews meanwhile had been unable to stop the fire, which has charred 18,500 acres (7,500 hectares) since it erupted on Sunday and exploded in ferocity.

"It is a possibility that we may lose a large portion of the town," said Scott Long, an official with Alberta's emergency management agency.

Major oil sands facilities were not in the path of the flames, but companies' efforts to help employees and evacuees and protect pipelines led to a decline in production.

Wildfire is worsening along highway 63 Fort McMurray, Alberta, Canada, May 3, 2016. [Photo/Agencies]

Images from the neighborhood of Beacon Hill in the city's southeast showed rows of charred house foundations, their upper stories burned to the ground, and blankets of white ash within. Officials said 80 percent of houses in the neighborhood, nearly 600 in total, were destroyed.

The regional government said two other neighborhoods, Abasand and Waterways, had sustained "serious loss." Alberta Premier Rachel Notley said a total of about 1,600 structures have been destroyed in Fort McMurray.

"There are certainly areas within the city that have not been burned, but this fire will look for them and it will find them and it will want to take them. And our challenge today is to prevent," said Chief Darby Allen of the Fort McMurray fire department.

The province declared a state of emergency for what was shaping up to be Canada's costliest natural disaster.

Canadian Prime Minister Justin Trudeau said the military can deploy air force planes to the stricken city as needed. Fort McMurray International Airport suspended all commercial flights in and out of the city.

Queen Elizabeth, Canada's head of state, said in a message that she and her husband Prince Philip were "shocked and saddened" by news of the fire. "Our thoughts and prayers are with all those who have been affected," she said.