Damage left by Harvey slams region’s economy

DALLAS — Flood damage from Harvey is likely to reach into the tens of billions and the storm is expected to cause the region’s economy to shrink, at least in the near term.

Harvey is soaking refineries along the Gulf Coast, leading to higher prices at the pump. Gasoline futures were up nearly 4 percent on Monday afternoon after rising 7 percent in premarket trading.

The storm could also put a kink in the shipment of consumer goods.

Harvey, which hit the coast as a Category 4 hurricane, will likely affect the South Texas economy for months. Mark Zandi, chief economist at Moody’s Analytics, predicted that the region’s economic output will be cut about 1 percent, or $7 billion to $8 billion. It will recover, he said, helped by money from insurance payments and government aid to rebuild.

Here’s a look at the effects on key industries: Prices are expected to spike over the next week or more as about 10 refineries representing more than 15 percent of the nation’s refining capacity are shut down.

Nearly 3 billion barrels of the 18 billion U.S. daily refining capacity has been knocked out. Most of the shut-downs have been precautionary, with only a few reports of minor flooding.

But the slow-moving nature of the storm means it could cause shutdowns to linger and leave more-lasting damage, said Goldman Sachs analyst Damien Courvalin. Another 850,000 barrels per day of capacity remains under threat, he said.

Exxon Mobil closed its huge Baytown refinery, which lies along the Houston Ship Channel, 25 miles east of the city. The plant can handle up to 584,000 barrels of oil per day. It turns that into gasoline and chemicals used in everything from shrink wrap to car tires.

Several other refineries closed, including a Royal Dutch Shell plant along the ship channel, and several in Corpus Christi, Texas, that are operated by Valero Energy, Citgo and Flint Hills Resources.

Oil companies have removed workers from about 100 platforms in the Gulf of Mexico since late last week. About 19 percent of oil production in the Gulf has been stopped, but that is down from nearly 25 percent on Saturday, according to the U.S. Bureau of Safety and Environmental Enforcement. The Gulf accounts for about one-fifth of U.S. oil production..

All major ports in the Houston and Corpus Christi areas remained closed Monday and might not open for several days until the week.

That would affect barge shipments of gasoline to the East Coast — if refineries have resumed operating. Several large container ships that were headed to Houston anchored off Mexico or Louisiana to wait out the storm. The port of Houston also handles export shipments of grain.