Hurricane Irma continued on a collision course with Miami after battering Puerto Rico and devastating a chain of small Caribbean islands, as the Category 5 storm threatens to become the most expensive in US history.
Hurricane Irma continued on a collision course with Miami after battering Puerto Rico and devastating a chain of small Caribbean islands, as the Category 5 storm threatens to become the most expensive in U.S. history. The chances for a direct hit on Florida Sunday continue to increase, according to the U.S. National Hurricane Center, which posted hurricane and storm surge watches for the peninsula and Florida Keys Thursday. That prospect has roiled markets for everything from orange juice to insurance and natural gas. Barclays Plc has estimated insured losses in a worst-case scenario from the storm at $130 billion.
“The Southeast Coast of Florida, including Miami, would be expecting potentially catastrophic storm surges Saturday night and Sunday morning,” said Todd Crawford, lead meteorologist at The Weather Company in Andover, Massachusetts. The timing of Irma’s turn on Saturday “will make the difference between a multi-billion dollar storm for Miami and the Gold Coast, and a major, but less devastating, weather event.”
Irma is one of three hurricanes churning in the Atlantic Basin. Hurricane Jose was following Irma’s path in the Atlantic, though it’s not expected to make landfall in Florida. In the Gulf of Mexico a third hurricane, Katia, was about 195 miles (315 kilometers) northeast of Veracruz, Mexico and is forecast to come ashore early Saturday.
Insurers extended their declines Thursday, with XL Group Ltd. dropping 4.8 percent and Everest Re Group Ltd. losing 5.2 percent. as of 11:02 a.m. in New York. Smaller companies that focus on the Florida market had steeper declines. Universal Insurance Holdings Inc., Heritage Insurance Holdings Inc. and Federated National Holding Co. are all down more than 10 percent since Friday.
Irma may knock out power to almost 2 million people, curb natural gas demand in one of the largest U.S. markets and threaten $1.2 billion worth of crops in Florida — the top U.S. grower of fresh tomatoes, oranges, green beans, cucumbers, squash and sugarcane.
The storm has already damaged or destroyed about 95 percent of homes on the small island of Barbuda, crippled its airport runway and broke a cellular tower in two, complicating relief efforts, Prime Minister Gaston Browne said on national television. “It is absolutely heart-wrenching.”
There was massive damage on two French West Indies islands where eight people were killed, French Interior Minister Gerard Collomb said at a press conference in Paris Thursday. The total death toll has risen to 10, according to the Associated Press.
“Anguilla received the hurricane’s full blast” and the British Virgin Islands were also affected, U.K. Foreign Office Minister Alan Duncan told parliament on Thursday.
In the U.S., mandatory evacuations were issued for the Florida Keys and Governor Rick Scott said he expected additional evacuation orders. President Donald Trump said in a Twitter post on Wednesday that he is “watching hurricane closely” and his team is already in the state.
Irma comes less than two weeks after Hurricane Harvey smashed ashore in Texas, knocking offline almost a quarter of U.S. oil refining capacity and causing widespread power outages and flooding. Current models show Irma veering away from gas and oil platforms off the coast of Texas and Louisiana, sparing Houston more devastation.
Irma’s top winds weakened slightly to 175 miles an hour from 180 miles an hour previously, but the storm remained Category 5 strength, the highest measure on the five-step Saffir Simpson scale. It was about 75 miles Puerto Plata, Dominican Republic, of about 11 a.m. New York time, according to the hurricane center.
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A direct strike on Miami at Category 4 strength could lead to insured losses of $125 billion to $130 billion, Jay Gelb, an analyst at Barclays, wrote in a note Tuesday. Uninsured losses would add to that. Losses from Katrina, both insured and uninsured, reached $160 billion in 2017 dollars after it slammed into New Orleans in 2005.
In other storm news:
Orange juice futures traded near their highest level since May. U.S. airlines capped ticket prices for passengers fleeing the hurricane. American Airlines Group Inc. canceled 2,185 flights Thursday through Monday and will stop all flights from Miami and three other Florida cities Friday afternoon, the airline said in an email statement. Insurers including Progressive Corp. and Allstate Corp. stopped issuing policies on new cars in some Florida counties. The storm is posing an unprecedented threat to the catastrophe-bond market.