You're listening to a podcast from the today programme on B.B.C. radio four storm Harvey may be dying down, it may be moving from Texas to lose it, Louisiana, but it is already sent a shock wave through world energy markets is Dominic with that, and the rest are business days.
We think of Texas as being important for oil J.R. Ewing Dallas and all that the last few years, it's become an even bigger player thanks to begin preece and increase and shale oil production and the dominance of its refineries, which turn oil into petrol, the mother petrochemical products.
Take some refineries make about one third of America's petrol and diesel to Europe, for example, thanks to the storm amount nearly all closed.
While some of the physical infrastructure has been damaged.
The bigger issue is, of course, people, this is Jay Cheatham prison of Pentium resources, which is based in Texas, we deal with natural disasters, fairly easily from a physical standpoint, he shot everything down, you get it, so the grain in the Morn impact you, whatever that hissed, and then, as soon as you can get your crews Maquis onion, we can round Marie's on a skeleton crew, as long as you're not attempting to do major maintenance programmes and one ginger crews backing on the drilling rigs, you have those back running.
So that's not a long term impact.
The bigger issue Or courses as the human tragedy and the people it, the work in the industry, because they oil rig what occurs, the people that are on the logging troggs and lowers the work, and we were finally in the Petro chemicals.
They are live in the area stuck her having to deal with this tragedy and wheels that was Jay cheat him of Pantheon resources Bim van Buren, the Chief Executive of Royal Dutch shell has told the B.B.C.'s business editor Simon Jack that he expects the long term damage and disruption will not be too great.
But, of course, we have a large refining petrol chemical operations in the Gulf of Mexico, we have a very large, deep water operation, and we are constructing new assets as well.
In the area, as a matter of fact, wherever her assess the impact of this, how material hasn't been on people production.
How long do you think it'll last, I think it's fair enough to say that there's major impact in the eruption on our Emperor, he says, you can imagine many, many of our people have been displaced major damage or issues with the home, they've had to put people up in temporary accommodation et-cetera.
I think the disruption for our staff is very substantial difficulties also for people to go round to get to work.
It's a matter of fact, we had to shut down refining a Petro chemicals complex in anticipation of all of this, we have some Significant flooding, doesn't look like.
We have a lot of wind damage, but still the tide of Commission, and it will take some time to restore that, and we had to evacuate.
One of deep water facilities in the golf, because it was in the path of the hurricane, but also that it doesn't look as if there was major damage.
And even read her again made landfall there, we are constructing one of our next big deep water projects.
It looks as if a damaged also limited, so Edward all the disruption for weeks still to come, but unfortunately, it's not the first time that we had to deal with major disruption of the golf.
This gives a sense of where this ranks in terms of disruption, and I'm not, it is right at the top of it was bend them during the Chief Executive of shell and with me now to discuss the fall out from the storm in Houston, is the test Shan't commit commodity strategist that A.T.F. securities and cliff, there is a slightly odd a fit, he was, we think of all the takes as has an oil producing region, but the price of oil might actually go down, and the price of petrol gasoline go up in the plane.
What's happened, I was so gasoline all petroleum is a product that's created from crude oil.
So what's happening right now is the the TexasLouisiana region, he's very big in the refining and all That refining capacity.
What about good.
Thirty per cent of the U.S thirty the refining capacity is out of Commission at the moment, so it's able to take in that wheel, the crude wheeled to process in team to the refined products, as this demand for oil, but miss gasoline production.
So, despite the fact that oil production is hampered refining pasties hampered even more, and therefore the demand for that Willie less.
That's why the price of oil is falling, but gasoline prices are up substantially up about twenty percent over the past week, which is, which is quite a big jumpers and the other thing that this underlines has the wee, or, as I said earlier, we think of Texas, as an oil producing region.
But really, in the last few years, it's completely changed has mainly because the shale oil coming out of Texas.
That's right, the whole of the U.S oil infrastructure has massively changed in the last seven years, we've reversed, about four years of production declined in the U.S for for forty four decades of production decline in the U.S., and that's largely due to share Wilford at the fracturing of oil in rocks, but in addition to that, there's been a resurgence in oil progress from produce from de go, Mexico, offshore, as well.
So they did the dynamics and U.S. production have changed massively and that production is very large, but, in particular, the refining capacity of that golfer Mexico region, brown, Texas, Louisiana, is very large, it's a big world plan, I think you're much the test Shah from heating s. e.
A.T.F. securities markets case, this morning is this Madrid him.
G. investment Wheaty staying with America, a bit of a surprise, he's today with yesterday's figures on euis G.D.P.US. now growing at three per Cynthia good news for Donald trump actually very good news, and I think you made that pertinent point in a speech last night, when he was talking about task reform, we had three per cent annualised rate over the second quarter, it was a good day for you s. data, we saw the U.S. private sector, non form payrolls coming out and that came up it to an n. seventy thousand jobs created compared to the estimate of one hundred eighty five that, why it's serious economy.
Doing so well at the minute, it was doing quite well in the last month of the Obama Presidency had we had a bit of a trump bump slowed wiser coming wide.
We see this, but is it simply the number's been revising all the risk that's party.
Also, but I think we've also seen an improvement in terms of constructing the manufacturing jobs in the economies in a strong place, we've seen solid job numbers coming through, for a while now, and I think it's just the economies and much stronger pace than her husband and will get a bit of a sphere.
Later on today on how the eurozone as doing being there's been one of the surprise packages of the year, what we hear about today.
So today, will get the eurozone inflation numbers, so we had numbers out of Germany and Spain.
Yesterday, they've surprised positively up with yesterday, so it'll be interesting to see what the numbers come up, they, particularly given the strength of the euro, and with the sea, the meeting on the seventh attempt in September, they've got an interesting decision to make here between inflation and what the Euros doing intensive monetary Tae use is all this, pointing to that that symbolic moment when the pound and the euro are apparently win one, as with the other.
I think there's a lot of speculation.
At what point do we hit parity and clearly, there's two sides of the kallai coin a decline.
We've seen in the Stirling on the back of Breck's uncertainty, but it's also the strength of the Uruk hippy Fiennes economy.
So I think it looks like to reach parity.
He'd either have to have a U.K. recession.
All we have to see a significant breakdown in terms of it, negotiations, as we go into twenty nineteen just very quickly bit of corporate news yesterday was the departure of John brother, who was a real rising star Dixon's, he got poached by Apple, of all people, to run their retail Empire.
Very quickly, he went to dunelm which sells sofas At the soft furnishings around the U.K., and now he's out of a job.
Again, yeah, it's an interesting, it's quite a confusing statement, we had from than elm that he left for personal reasons, and it was a reasonable severance packaged and they talked about an easy fit between his leadership style, the culture in pony dill the Nam is very much a family run business.
So again, if you get a leader who says too much or questions too much give customer focus that could see a clash potentially will see where he ends up next.
Thank you very much, retune, the horror of and g. a rigourous as will know that there was still wide pretty widespread concern over the new business rates, system, which came in and April.
Now there's a new problem.
On top of that, the so called staircase Tex a Supreme Court decision means if your business occupies two floors of a building, you'll be assist and charged for both, not just one area, a break with the way it used to be done, and which was, resulting in backdated bills for many companies, Andrew he bitterness adric there for business rates at the property consultancy geal him and explain what's going on here.
How it used to work, and how it's working, we had sixty years of established practice, and this Supreme Court decision resulting concerned two floors in a multi storey building connected by a high speed lift and of the Supreme Court came to a decision in two thousand fifteen that scent that effectively, they should be separately assessed.
Does that mean higher bills, necessarily, well, it does, potentially, because you look at quantum and the floor plates, but the issue, where it's hitting business is really hard and ze contiguous floors and there was some different comments made by a number of the Lord justices when they gave their judgement about the principles that should be applied, and Lord come with said, avoid narrow factual disputes about degrees, a connection, and it seems that, at the moment, at the approach that's been adopted, and we flag this up to, so the Minister's back in two thousand sixteen and they promise that they keep an eye on what would be the valuation Office was doing, and that is of it seems to be hitting the press now and causing lots of problems for businesses, so a business is getting backdated bills from previous assessment sort of being read.
They are one of the claims, and one of the suggestions that professional bodies, such as the height of a lot of beady Institute for Ebenezer writing made was is that consideration should be given similar to that that happened in the ports, back in two thousand ten was not to separately are said not to backdate these bills, and actually to support businesses, it was a very difficult time when this unexpected tax suddenly arrives on their doorstep.
And how Big are these bills.
Do you have any examples of of what backdated bills have been presented.
Well, the problem is, is that you're going to eat, you could end up, if you have a number of property number of Herod betterment and units, a property within a building multiple bills, and I had a quick look last night for property in central London, where every single meeting room has been separately assessed and that will lead to an individual bill.
It covers meeting rooms, t. points business centres lounges and that the pure administration with this is not only difficult with business, but also for local authorities, and there's one case, I think that was being talked about even cleaner's cupboards were being individually assessed and a bill was being sent, we've had, we've had reports of that, but you have to look, you can have a look at the rating list online, you can see all of these distant entries, and they're effectively being reconstituted out of what was an original assessment.
And that is coming out of the blue.
Yet the that the issue has been rumbling on since the proposals were submitted by a rate payer back in two thousand seven, and it's only in two thousand fifteen at the Supreme Court came up with a decision, and then ultimately the valuation Office is Hansi were set to start altering the list Andrew here that and thank you very much from l. head the property Advisory can't accompany you can listen to more free content from the today programme by going to w. w. w. dot dot co dot U.K. forward slash, today.