Hurricane Harvey strengthened to a Category 3 hurricane Friday afternoon, threatening the U.S. Gulf Coast as the type of storm that has historically tended to send utilities and insurance stocks lower.
Harvey is quickly turning into the worst hurricane to hit the U.S. mainland in more than a decade, and is expected to cross over the Texas coast by early Saturday. The National Hurricane Center expects Harvey to linger over the state for days. Houston and the Texas coastline could experience heavy flooding, authorities in the energy-producing state warned.
"Until now hurricanes have not directly threatened the infrastructure and production associated with the US shale-inspired export boom," Michael Cohen, head of energy markets research at Barclays, said in a Friday report. "We think that the flooding impact of Hurricane Harvey could make it more destructive to US crude and product supplies as well as port facilities than the market is currently assuming."