U.S. Navy photo by Lt. Cmdr. Brian Riley
Meteorologists report that at the moment Irma is the most powerful hurricane in the Atlantic observed in the last decade. It has already reached the fifth, maximum category, and is stronger than the Hurricane Harvey, which earlier struck coast of Texas and led to a catastrophic flood.
It is known that Harvey caused serious damage to the energy sector, paralyzing a fifth of the oil refining capacity in the country. Irma may bring serious consequences to the oil market. They say that the hurricane will paralyze oil production in the Mexican basin.
The difficulty lies in the fact that Harvey caused only a temporary halt to the work of enterprises, and Irma can result in real damage to the towers and pipelines in the Gulf of Mexico, almost all American media write.
Recall that the production in the Gulf is about 1.75 million barrels per day.
However, the oil market does not seem to be concerned. Yes, we saw the growth of futures more than 2% on the eve, (almost 3% for American light oil), but the growth was more likely driven by other news.
Recall that Hurricane Harvey, which led to the shutdown of many oil refineries, allowed speculators to play on growing gasoline prices and the falling oil prices. The logic is very simple: the refineries are closed, so there is no demand for oil, but there is an acute shortage of gasoline.
Yesterday it was reported that some refineries were restoring their work, and speculators began closing positions, which led to a drop in gasoline prices and a rise in oil prices. In any case, the quotes are not taking into account consequences of Hurricane Irma.
By the way, it must be said that some publications argue that this element will mostly affect agriculture, rather than energy. As we know, Florida is the leader in the production of oranges, which is why futures for orange juice are now showing strong growth.
Florida is the world's largest producer of orange juice after Brazil. Futures for orange juice for November delivery jumped by 6.9% - the largest intraday growth since January 28, 2016. The price of cotton also went up. December futures went up by 4.2%. In addition, the aggregate trading volume of these two contracts has doubled compared to the average of 100 days.
AccuWeather estimates that total amount of destruction from Hurricane Harvey could reach $ 190 billion, or 1% of US GDP.
Joel Myers, founder and president of AccuWeather, one of the world's leading private weather forecasters, said that Hurricane Harvey is the worst hurricane in US history.
source: bloomberg.com
It is known that Harvey caused serious damage to the energy sector, paralyzing a fifth of the oil refining capacity in the country. Irma may bring serious consequences to the oil market. They say that the hurricane will paralyze oil production in the Mexican basin.
The difficulty lies in the fact that Harvey caused only a temporary halt to the work of enterprises, and Irma can result in real damage to the towers and pipelines in the Gulf of Mexico, almost all American media write.
Recall that the production in the Gulf is about 1.75 million barrels per day.
However, the oil market does not seem to be concerned. Yes, we saw the growth of futures more than 2% on the eve, (almost 3% for American light oil), but the growth was more likely driven by other news.
Recall that Hurricane Harvey, which led to the shutdown of many oil refineries, allowed speculators to play on growing gasoline prices and the falling oil prices. The logic is very simple: the refineries are closed, so there is no demand for oil, but there is an acute shortage of gasoline.
Yesterday it was reported that some refineries were restoring their work, and speculators began closing positions, which led to a drop in gasoline prices and a rise in oil prices. In any case, the quotes are not taking into account consequences of Hurricane Irma.
By the way, it must be said that some publications argue that this element will mostly affect agriculture, rather than energy. As we know, Florida is the leader in the production of oranges, which is why futures for orange juice are now showing strong growth.
Florida is the world's largest producer of orange juice after Brazil. Futures for orange juice for November delivery jumped by 6.9% - the largest intraday growth since January 28, 2016. The price of cotton also went up. December futures went up by 4.2%. In addition, the aggregate trading volume of these two contracts has doubled compared to the average of 100 days.
AccuWeather estimates that total amount of destruction from Hurricane Harvey could reach $ 190 billion, or 1% of US GDP.
Joel Myers, founder and president of AccuWeather, one of the world's leading private weather forecasters, said that Hurricane Harvey is the worst hurricane in US history.
source: bloomberg.com
