Oil falls on Japan earthquake

13:21, March 12, 2011      

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U.S. crude oil price on Friday fell as a massive earthquake and tsunami hit Japan, the world's third biggest oil consumer.

The New York crude benchmark opened at 102.64 dollars, and then went though a volatile trading session, once touching the lowest intraday level of 99.01 dollars a barrel.

The magnitude-8.8 earthquake rattled Japan's northeastern Honshu island in the afternoon, unleashing a severe tsunami about 10 meters high that caused numerous deaths and injuries. Regions as far as Hawaii and Alaska of the United States were also affected by the waves.

The quake, the most powerful since Japan started keeping records 140 years ago, sparked fires in cities and towns along the coast, and several refineries shut down.

Japan's daily oil consumption in 2009 was 4.4 million barrels, which was covered virtually in full by imports. After the earthquake, analysts thought the country's demand for oil could be lower at least temporarily. That triggered a large-scale sell-off across markets.

"In short term, the price will go down because of Japan's earthquake," said Raymond Carbone, senior oil trader at the New York Mercantile Exchange. "But the market is still a very nervous one, because of concerns about the Middle East."

Light, sweet crude for April delivery fell 1.54 dollars to settle at 101.16 dollars a barrel on the New York Mercantile Exchange, posting its first weekly loss in four weeks -- a drop of 3.26 dollars or 3.12 percent.

In London, Brent crude also fell and last traded around 113 dollars a barrel.

Source: Xinhua

 
 
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