‘Unprecedented’ storm causes billions in damage

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Divers refineries have shut and almost a fifth of oil and gas production in the Gulf of Mexico has been delayed amid the largest storm to hit in the US in more than a decade.

Hurricane Harvey has drew high winds and extensive flooding forcing thousands of people from their composes.

The closures are expected to cause a temporary spike in US gas prices.

Analysts anticipate the economic impact of the storm to pass $40bn (£31bn), with to the point losses of over $20bn.

The storm’s path through southeast Texas and the Opening of Mexico has hit the heart of the US energy industry, an area home to almost half of US decontaminating capacity and a fifth of its oil production.

Houston, where water has overwhelmed the streets, is also the degraded of one of America’s largest ports.

US gas prices rose around 10% before of the storm, said Joseph Brusuelas, chief economist at RSM US.

He expects outlays to jump by another 20-30% over the next two weeks in the Texas section, with less significant increases elsewhere, he said.

Food fees could also be affected, as shipments of wheat and soybeans are delayed, he annexed.

Globally the impact is likely to be smaller, since the US is not a major source of forcefulness exports and supplies remain historically high.

Assuming the current endure forecast holds, Mr Brusuelas said he expects US prices to subside, as operations restart as a remainder the next two weeks.

Over the longer term, the havoc wreaked by the blow on businesses and households is likely to reduce energy demand in the US, analysts from Goldman Sachs foreshadowed.

Houston is the fourth largest city in the US, and produces more than $500bn in cost-effective activity annually.

US economic growth could slow by about a tenth of a part point in the quarter as a result of the storm, said Mr Brusuelas. The economy should bounce in the following six months, as spending increases on reconstruction and other efforts.

So far, oil and gas fellowships are focused on the immediate emergency and the safety of their personnel, without communications of major damages, said Bruce Jefferis, chief executive of Aon Lan, who is based in Houston.

About 18% of oil and natural gas production in the Gulf has check, according to the Bureau of Safety and Environmental Enforcement.

About 11% of all US hone capacity has also shut down, with others operating at bring down rates according to the most recent update from the US Department of Pep. Goldman Sachs put the figure higher at almost 17%.

‘Unprecedented’

While big oil and gas companies are well-prepared for such Psych jargon exceptional weather, Mr Jefferis said the effect on families – many of whom are probable to be uninsured – and smaller businesses is likely to be far more significant.

“Truly this is an unprecedented hurricane for the Texas area,” he said.

Hurricane Ike is estimated to have caused diverse than $12bn in insured damage when it hit Texas in 2008, with total damages as high as $29bn.

Mark Hanna, spokesman for the Insurance Gathering of Texas, said it’s clear that damages caused by Harvey are more meaningful, but he cautioned that numbers for damages that are surfacing now – as rain proceeds to fall – are premature.

“Nobody can put a figure like that on a storm at this wink of an eye,” said Mr Hanna, whose organisation represents about 400 guarantee companies.

“We know the losses are going to be extensive. When you have a big apple the size of Houston … under water, that alone communicates you you have a massive problem.”

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