News Analysis: Experts divided on possible economic impact of Japan's catastrophic quake (5)

08:34, March 14, 2011      

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OIL PRICE

After the quake on Friday slammed Japan, the third biggest oil importer in the world, light, sweet crude for April delivery fell to below 100 dollars a barrel for the first time in more than a week.

Considering Japan's huge oil consumption, around 4.4 million barrels a day, some investors feared the demand would fall after the disaster at least temporarily.

However, experts expected that the quake wouldn't significantly, or in the long run, affect oil price. Rather, traders bet that the quake would actually drive increased demand for oil when Japan starts post-quake reconstruction.

IMPACTS ON GLOBAL ECONOMIC RECOVERY

As Japan has a global bearing on the industrial chain, the supply disruption is bound to have a ripple effect on other manufacturers beyond Japan, which many feared could hold back global recovery.

For example, Japanese suppliers accounted for more than 20 percent of global semiconductor products, including NAND flash, an indispensable electronic part of Apple's iPad. Besides, the country is also the supplier of the wings, landing gears and other major parts of Boeing's 787 Dreamliner.

Nevertheless, some analysts noted that from a global view, the influence would just be temporarily.

Alfredo Coutino, economist with Moody's Analytics, believed Japan's post-quake reconstruction would even serve to boost the global trade.

Source: Xinhua

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