More Flooding Ahead for Texas, Losses Mounting
$USO, $UNG, $UGA
The flood waters deepen in Houston, the Hub of the US Crude Oil industry.
As floods inundated the nation’s 4th-largest city Monday, with an estimated 20 ins of rain still to come, predictions of damage ranged as high as $100-B.
Wall Street and Washington braced for the repercussions of the costliest US natural disaster since Hurricane Sandy in Y 2012.
The storm has been blamed for 6 deaths in Harris County since Sunday, according to county officials.
More than 30,000 residents will be displaced, a number sure to climb now that the Army Corps of Engineers has begun to release water from two dams, a relief tactic that will flood additional neighborhoods.
More than 450,000 residents will require assistance, according to the Federal Emergency Management Agency (FEMA), which said it will be at work in Houston for years.
Loss estimates for Harvey vary widely, an insurance analyst told HeffX-LTN that costs could surpass $100-B.
Greater Houston, which includes 8 counties, covers 8,778 sqm, an area larger than New Jersey. The metro area of 6.8-M is loosely organized with multiple centers of commerce, defined by vast and looping highways, strip malls and subdivisions.
The nation’s most diverse municipality, Houston’s economy boomed even as the price of Crude Oil lagged.
If Houston were its own country, its economy would be the world’s 30th largest, according to city statistics.
Houston is the site of 18 Fortune 500 companies and the world’s biggest medical complex, but it’s synonymous with the Gulf Coast’s Crude Oil sector, an industry suddenly hobbled.
Gasoline futures in New York extended gains a 6th session Tuesday as more than 1-M bbls of fuel-making capacity was knocked offline, and natural-gas fields and offshore-drilling rigs shut down. The motor fuel advanced 1.3% to $1.7342 gal.
Ports along a 250-mile stretch of Texas coast were closed to tankers, as 22 vessels laden with a combined 15.3-M bbls of Crude Oil from Brazil and Colombia were drifting off the coastline, waiting for the all clear.
Ten of the state’s 25 refineries are shut down, accounting for about 50% the 6-M BPD of capacity, said the Chairman of the 3-member Texas Railroad Commission, which regulates the industry. Companies will have to wait for floods to recede before they can evaluate damage.
Harvey is expected to have little effect on US GDP, and may deal only a short-term blow regionally. As with most natural disasters, the rebuilding of damaged homes, businesses and infrastructure will later add to the economy.
Large companies should be back on their feet within weeks.
“You’re going to see very rapid reaction from Congress, certainly from the president,” President Trump said at a news conference Monday. “You’re going to get your funding.”
Expect Houston to come back stronger than it was before Hurricane Harvey, anybody who bets against the City of Houston is wrong.
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