Irma on collision course with Miami after wrecking Caribbean

(Bloomberg) Hurricane Irma continued on a collision course with Miami after devastating a chain of Caribbean islands, triggering the largest evacuation in Miami-Dade County history and threatening to become the most expensive storm in US history.

The life-threatening storm is heading for a direct hit on Florida on Sunday, according to the US National Hurricane Center. 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 (€107 billion). Irma may re-enter the Atlantic and make a second landfall on Monday somewhere near Savannah, Georgia, and Charleston, South Carolina.

"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."

In the US, mandatory evacuations were issued for the Florida Keys and other areas. Around 650,000 people were told to leave Miami-Dade, the largest evacuation ever attempted in the county.

Irma is one of three hurricanes churning in the Atlantic Basin. Jose, which was following Irma’s path in the Atlantic, became the third major hurricane of the 2017 Atlantic season. In the Gulf of Mexico, Katia was about 315 kilometers northeast of Veracruz, Mexico, and is forecast to come ashore overnight on Friday.

Insurers extended their declines on Thursday, with XL Group Ltd. dropping 5.1% and Everest Re Group Ltd. losing 6.8% in New York. Smaller companies that focus on the Florida market had steeper declines. Universal Insurance Holdings Inc. and Federated National Holding Co. fell more than 10%.

Irma may knock out power to almost two million people, curb natural gas demand in one of the largest US markets and threaten $1.2 billion worth of crops in Florida -- the top US grower of fresh tomatoes, oranges, green beans, cucumbers, squash and sugarcane.

The storm has already damaged or destroyed about 95% 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 on Thursday.

Power outages

Irma comes less than two weeks after Hurricane Harvey smashed ashore in Texas, knocking offline almost a quarter of US 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 held at 175 miles an hour, meaning it’s still at Category 5 strength, the highest measure on the five-step Saffir Simpson scale. It was about 40 miles south of Grand Turk Island as of about 5pm New York time, according to the hurricane centre.

Irma’s eye is passing between Hispaniola and the Turks and Caicos islands before entering the Bahamas late Thursday and passing through the chain on Friday, where it could bring as much as 63cm of rain and a storm surge of as much as six metres. Hurricane-strength winds now reach out 70 miles from the eye, up from 60 miles earlier.

Why we expect more havoc from hurricanes like Harvey

A 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 on Tuesday. Uninsured losses would add to that. Total losses from Katrina 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.
• American Airlines Group Inc. said it’s canceled more than 2,400 flights due to Irma, though it’s adding 16 extra flights, or more than 3,600 seats, to move people out of Miami.
• Limetree Bay Terminals’ St. Croix oil facility in the US Virgin Islands has been shut since Tuesday evening, according to person familiar with operations.