Hurricane Harvey is expected to be classified a Category 3 hurricane before it strikes the coast of Southeast Texas this morning, jeopardizing the oil refinery industry located in and around Houston, the 4th largest city in the United States. This is a major hub for oil refineries, both U.S.-based and from elsewhere around the world. Rainfall could reach up to 35 inches from this storm, and flooding is the major hazard for the refinery industry.
The last time a major storm hit this region was in 2008, when Hurricane Ike cost the industry roughly $30 billion, as well as more than 100 lives. Currently, Hurricane Harvey mounting the 17-foot sea wall in Galveston, TX may have devastating affects to Galveston Bay and the Houston shipping channel, one of the busiest ports in the U.S. and home to several oil refineries, such as Valero ((VLO - Free Report) and Marathon ((MRO - Free Report) and foreign-based TOTAL ((TOT - Free Report) and Petrobras ((PBR - Free Report) . (And all this without Glen Campbell around any longer to sing Galveston’s praises.)
Tragedy aside for a moment, if you’re looking for something to bolster oil prices, you may have just found it. Both WTI and Brent crude prices are up in this Friday pre-market, not by much but by roughly a half a percentage point. Should this hurricane be as big a disaster as some are expecting, we should see at least gasoline prices climb throughout the day and perhaps into next week.
July Durable Goods
The preliminary measure of Durable Goods orders for July was down 6.8% this morning, lower than analysts had anticipated. Subtracting Defense costs, this number blossoms to -7.8%, and ex-Transportation that figure grows to +0.5%. Combined, non-Defense, ex-Aircraft results are +0.4% for the month of July.
Jackson Hole, Continued
Both Fed Chair Janet Yellen and European Central Bank (ECB) President Mario Draghi are scheduled to speak today at the symposium of monetary operatives in Jackson Hole, WY today. It’s the first time Draghi has appeared in three years, and back then he presaged the ECB asset-buyback program that has helped dig the EU out of its economic hole. Odds are decent (better than Conor McGregor’s chances of beating Floyd Mayweather) that Draghi will announce a dialing back of this program now that the EU is on more solid footing.