Police: 200-300 bodies found in Japan after quakes, tsunami
LONDON (Reuters) – Oil slid by more than $3 on Friday, with U.S. crude falling below $100, after an earthquake rocked Japan, creating a 10-meter tsunami and shutting down dozens of plants in the world’s third-largest oil consumer.
The oil market was also keeping an eye on a planned day of demonstrations in Saudi Arabia, the world’s top oil exporter, and violence in Libya, which has disrupted its oil exports.
U.S. crude fell to as low as $99.01 a barrel and was trading at $99.65 by 1400 GMT (9 a.m. EST). ICE Brent crude fell $2.31 to $113.12 a barrel by the same time. It has fallen from a 2-1/2-year high of $119.79 on February 24.
Japan was hit by a magnitude 8.9 earthquake, the largest since observations began in the late 19th century. About 200-300 bodies have been found, the local police in Miyagi, northern Japan, where the quakes and the tsunami hit the hardest, said.
“This natural disaster could result in another sharp rise in risk aversion on markets and a continuation of yesterday’s correction on commodity markets,” said Commerzbank.
Japan is the third-largest energy consumer after China and the United States and imports almost all its energy needs.
Some refineries and nuclear power plants were shut. Some analysts pointed out the shutdowns may increase import demand for refined oil products and fuels for electricity generators.
“Short-term the disruption in activity will be clearly negative for Japanese oil demand, but you may find that post the initial impact of the tsunami, there will be a need to deliver oil products to meet demand if you suffer loss in refinery output,” said Harry Tchilinguirian, BNP Paribas’ head of commodity markets strategy.
The earthquake triggered a 10-meter tsunami that swept away everything in its path, including houses, cars, ships and farm buildings. Tsumani spread across the Pacific.
The Japanese government declared emergency at nuclear power plants and evacuated thousands of residents. No radiation leak had been reported so far.
European shares fell at the opening to a three-month low after the quake in Japan and on growing unrest in the Arab world. .EU
U.S. retail sales rose 1 percent, the largest gain since October. But it did not reverse the fall in oil prices.
Saudi Arabia’s capital was quiet ahead of a planned day of demonstrations, which will test whether activists calling for political reform online will succeed in taking their protests to the streets.
In Hofuf, more than 200 protesters took to the streets, two activists told Reuters, responding to the call by online social networks for protests in favor of political reform.
A loose coalition of liberals, rights activists, moderate Sunni Islamists and Shi’ite Muslims has called for reform, and a Facebook page urging protests, strictly forbidden in the conservative kingdom, attracted more than 30,000 supporters.
“It is impossible to know what the outcome will be in the Middle East, but while support for … protests could prove to be a short-term oil market inflection point, looking further forward it would be optimistic to expect Libyan oil production to return to normal levels this year,” Lawrence Eagles with J.P. Morgan said in its research note.
In Libya, forces loyal to Libyan leader Muammar Gaddafi have entered the oil port of Ras Lanuf in the east of the country and are fighting for control of the town, rebels said on Friday.
The unrest in oil rich North Africa and the Middle East has so far taken precedence over economic woes. Friday protests are also planned in other Gulf countries such as Yemen, Kuwait and Bahrain, after the day’s religious prayers, inspired by upheavals in Tunisia and Egypt.
(Reporting by Ikuko Kurahone, additional reporting by Alejandro Barbajosa in Singapore; editing by James Jukwey and Jane Baird)