Hurricane Harvey produced large damages throughout the United States and Texas. The natural phenomenon is a category 4 hurricane. The tropical cyclone was powerful enough to cause the first landfall in the U.S. since 2005. On top of that, it also pierced the core of America’s energy industry. As a consequence, oil prices plummeted while the European Central Bank President refused to deliver a clear situation on the euro. Therefore, the currency hit a 2 ½-year high.
The U.S. Registered High Oil Prices after Harvey Despite National Oil Excess
The flooding that Tropical Storm Harvey induced affected the Texas coast heavily. However, this area is crucial for the United States as well. It contains 10% of U.S. crude oil refineries. As a consequence, gasoline futures hit 6.8% at some point only to come down to 5.9% in a yet concerning case for motor fuel. Oil gained almost $48 a barrel.
Hurricane Katrina triggered similar aftermath after it hit Louisiana hard in August 2005. The natural calamity kneeled the U.S. economic growth stealing more than half of its value in the quarter following the hurricane. As the next year in 2006 saw reconstruction efforts and gasoline prices struggling for reaching normal value, the national financial situation started recovery.
The Harvey damages affected almost a quarter of Gulf of Mexico’s oil production. The amount was already at massive numbers as U.S. was heading for low oil prices and oil excess. However, after the hurricane hit the coast, several U.S. traders weighed in to turn to North Asia for imports of products.
The ECB President Mario Draghi Failed to Talk Euro Down
The rain is unlikely to stop before Wednesday. Therefore, the disruptive situation might continue to last until the rain cessation. On Monday, markets were attempting to recalibrate the impact the oil production received from Harvey. As a consequence, prices showed mixed numbers.
At the same time, the euro surged to a 2 1/2 –year high. This event was the result of the speech of the ECB President Mario Draghi where the reassurance regarding the strength of the currency was missing. Therefore, the euro jumped to $1.19665 on Monday and received a small deflation to $1.1924.
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