HURRICANE DOES IT FOR OPEC
rains likely to continue for more days; water released from reservoirs to save downtown
launceston (Australia) — Hurricane Harvey may achieve in global crude oil markets in a few days what Opec and its allies have struggled to achieve in months — a tightening of supplies and a rise in prices.
Harvey, which has been downgraded to a tropical storm, hit the coast of Texas on Friday as the most powerful hurricane to hit the US state in more than 50 years, causing widespread damage and flooding.
The refining capacity that has been idled because of the storm is about 11.2 per cent of the US total, and the immediate impact is being felt in gasoline prices.
Benchmark US gasoline futures jumped as much as 6.8 percent in early trade on Monday in Asia to touch $1.7799 a gallon.
While much of the offshore crude production in the Gulf of Mexico was shut in ahead of Harvey’s passage, the yet to be quantified damage from the storm may lie with the onshore, shale oil output that was in the storm’s path.
The risk is that onshore production takes longer to return than the market may expect. If this is the case, customers for US crude and product exports may well find themselves scrambling to line up replacement cargoes. Overall, this makes it more likely that prices will rise in the short term. —
Houston is facing worsening historic flooding in the coming days as Tropical Storm Harvey dumps more rain on the city, swelling rivers to record levels and forcing federal engineers on Monday to release water from area reservoirs in hopes of controlling the rushing currents.
Harvey was the most powerful hurricane to strike Texas in more than 50 years when it came ashore on Friday near Corpus Christi, about 220 miles south of Houston, and has killed at least two people. It has since lingered around Texas’ Gulf Coast, where it is forecast to remain for several more days, drenching parts of the region with a year’s worth of rain in the span of a week.
Rains have submerged cars and turned freeways into rivers, with more flooding expected when the storm shifts back in the direction of Houston. Harvey’s centre was 90 miles southwest of Houston on Monday morning and forecast to arc slowly towards the city through Wednesday, with the worst floods expected later that day and on Thursday.
Schools, airports and office buildings in the nation’s fourth largest city were shut on Monday as chest-high water filled some neighbourhoods in the low-lying city that is home to about 2.3 million people.
The metropolitan area, home to 6.8 million people, also is the nation’s refining and petrochemical hub, which has been crippled by the storm. Numerous refiners shut operations, likely for weeks.
Torrential rain also hit areas more than 150 miles away, swelling rivers upstream and causing a surge that was heading towards the Houston area, where numerous rivers and streams already have been breached. Some areas have already seen as much as 30 inches of rain, according to the National Weather Service.
By the end of the week in some Texas coastal areas the total precipitation could reach 50 inches, which is the average rainfall for an entire year, forecasters said.
Harvey is expected to produce an additional 15 to 25 inches of rain through Friday in the upper Texas coast and into southwestern Louisiana, the National Hurricane Center said.
More than 30,000 people are expected to be placed temporarily in shelters, FEMA Administrator Brock Long said at a news conference on Monday. The George Brown Convention Center in downtown Houston now has about 2,500 people, up from 1,000 last night, as people continue to arrive at the centre.
Wendy Rom, 24, was among those taking refuge at the centre with her husband and 1 1/2-yearold daughter.
“The water was high, entering our house,” she said, “so we moved to the second floor but they started evacuating the neighbourhood so I came with my whole family.”
Dallas, 240 miles north of Houston, also was setting up a “mega shelter” at its convention center to house 5,000 evacuees, the city said in a statement.
The US Army Corps of Engineers said on Monday that it was releasing water from two nearby reservoirs into Buffalo Bayou, the primary body of water running through Houston.
“If we don’t begin releasing now, the volume of uncontrolled water around the dams will be higher and have a greater impact on the surrounding communities,” said Colonel Lars Zetterstrom, Galveston district commander of the Corps.
The Harris County Flood Control District said it expected the release to start flooding homes around the Addicks and Barker reservoirs on Monday morning.
Authorities ordered more than 50,000 people to leave parts of Fort Bend County, about 35 miles southwest of Houston, as the Brazos River was set to crest at a record high of 59 feet this week, 14 feet above its flood stage. —
What we’re seeing is the most devastating flood event in Houston’s recorded history Steve Bowen Meteorologist