The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Bloomberg
It keeps getting deeper for Houston, the epicenter of the US oil industry. As floods inundated the nation’s fourth-largest city on Monday, with more than a foot of rain likely still to come through Friday, predictions of damage ranged as high as $100 billion. Wall Street and Washington braced for the repercussions of the costliest US natural disaster since Hurricane Sandy in 2012.
Tropical Storm Harvey, which made landfall as a category 4 hurricane, drifted into the Gulf of Mexico, poised to recharge before crashing ashore again Wednesday on the Texas-Louisiana border.
As much as 30 percent of the nation’s refining power was imperiled, according to analysts at Tudor Pickering Holt & Co.
Houston was born from the wreckage of a cataclysmic storm
in 1900, and in the decades since has weathered not only water and wind but the gyrating fortunes of the oil industry. The sprawling megalopolis, which takes a perverse pride in its booms and busts, will endure Harvey as well, said Patrick Jankowski, senior vice president of research for the Greater Houston Partnership.
“If $26 oil didn’t destroy Houston, Hurricane Harvey is not going to destroy Houston,†he said.
The storm has been blamed for six deaths in Harris County since Sunday, according to county officials. Houston television station KHOU reported Monday that another six, members of one family, were believed to have drowned when floods swept away their van.
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, which said it will be at work in Houston for years.
Hurricane Katrina, which in 2005 became the most expensive hurricane to hit the US, cost about $118 billion, while Hurricane Sandy cost about $75 billion. Loss estimates for Harvey vary widely, but David Havens, an insurance analyst at
Imperial Capital, said costs could surpass $100 billion.
The storm promises to test the resilience of the biggest city in a state that’s home to almost 1 in 12 US workers. Greater Houston, which includes eight counties, covers 8,778 square miles, an area larger than New Jersey. The metro area of 6.8 million 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 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 oil sector, an industry suddenly hobbled.
Gasoline futures in New York extended gains a sixth session Tuesday as more than a million barrels of fuel-making capacity was knocked offline; and natural-gas fields and offshore-drilling rigs shut down. The motor fuel advanced 0.4 percent to $1.7183 a gallon at 5:09 a.m. New York time.