Harvey slams region's economy, with damages in the billions

AP Enterprise Author

DALLAS (AP) – Flood injury from Harvey is more likely to attain into the tens of billions and the storm is predicted to trigger the area’s financial system to shrink, at the least within the close to time period.

Harvey is soaking refineries alongside the Gulf Coast, resulting in greater costs on the pump. Gasoline futures have been up almost four % on Monday afternoon after rising 7 % in premarket buying and selling.

The storm might additionally put a kink within the cargo of shopper items.

Harvey, which hit the coast as a Class four hurricane, will possible have an effect on the South Texas financial system for months. Mark Zandi, chief economist at Moody’s Analytics, predicted that the area’s financial output will probably be minimize about 1 %, or $7 billion to $eight billion. It’s going to recuperate, he stated, helped by cash from insurance coverage funds and authorities assist to rebuild.

This is a take a look at the consequences on key industries:

– REFINING: Costs are anticipated to spike over the subsequent week or extra as about 10 refineries representing greater than 15 % of the nation’s refining capability are shut down.

Almost three billion barrels of the 18 billion U.S. every day refining capability has been knocked out. A lot of the shut-downs have been precautionary, with just a few reviews of minor flooding.

However the sluggish-shifting nature of the storm means it might trigger shutdowns to linger and depart extra-lasting injury, stated Goldman Sachs analyst Damien Courvalin. One other 850,000 barrels per day of capability stays beneath menace, he stated.

Exxon Mobil closed its large Baytown refinery, which lies alongside the Houston Ship Channel, 25 miles east of the town. The plant can deal with as much as 584,000 barrels of oil per day. It turns that into gasoline and chemical compounds utilized in every part from shrink wrap to automotive tires.

A number of different refineries closed, together with a Royal Dutch Shell plant alongside the ship channel, and a number of other in Corpus Christi, Texas, which might be operated by Valero Power, Citgo and Flint Hills Assets.

Fuel stations in Houston are operating dry. Rick Joswick, an analyst with S&P International Platts’ PIRA Power, stated it stays to be seen whether or not distribution terminals have been broken, which might crimp provides past Houston.

– OIL AND GAS: Oil corporations have eliminated staff from about one hundred platforms within the Gulf of Mexico since late final week. About 19…

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