A fire at Cosmo Oil Co. ’s oil refinery in Chiba, outside Tokyo, is spreading, a Fire Department spokesman said. Photographer: Andy Rain/Bloomberg
Oil fell below $100 a barrel in New
York for the first time in more than a week after Japan’s
strongest earthquake in at least a century forced refiners to
shut processing plants.
Brent crude futures in London are heading for their first
weekly decline in seven following the temblor in the world’s
third-largest crude user. A fire at Cosmo Oil Co.’s oil refinery
in Chiba, outside Tokyo, is spreading, a Fire Department
spokesman said. JX Nippon Oil & Energy Corp. shut refineries in
Sendai, Kashima and Negishi.
“The earthquake is having a psychological impact on the
market in triggering a rise in risk aversion,” said Carsten Fritsch, analyst at Commerzbank AG in Frankfurt. “The effect is
also physical, in that oil demand from Japan could temporarily
Crude for April delivery tumbled as much as $3.69, or 3.6
percent, to $99.01 a barrel in electronic trading on the New
York Mercantile Exchange. It was at $99.72 at 11:41 a.m. London
time. This week prices are down 4.4 percent, the first weekly
drop in a month.
Brent oil for April settlement on the London-based ICE
Futures Europe exchange dropped as much as $2.93, or 2.5
percent, to $112.50 a barrel. It was trading at $112.92 at 11:40
local time. The contract has lost 2.8 percent this week and is
headed for the first decline in seven weeks.
Anti-government demonstrators in Saudi Arabia, OPEC’s
largest producer, are advocating a “Day of Rage” today, and
police in anti-riot vehicles patrolled the capital, Riyadh. In
the kingdom’s Eastern Province, home to many of its minority
Shiite Muslims, three people were injured yesterday when
security forces broke up a protest in the city of Qatif, Major
General Mansour al-Turki, an Interior Ministry spokesman, said.
The Organization of Petroleum Exporting Countries will
release its monthly report on global oil supply and demand
levels later today.
Japan was struck by an 8.9-magnitude earthquake off the
northern coast near the city of Sendai at 2:46 p.m. local time.
The country was hit by 10 aftershocks, according to the U.S.
The Japan Meteorological Agency is warning of further
aftershocks and told people to avoid coastal areas and evacuate
to higher ground, according to an official at a press conference
in Tokyo shown on NHK. Aftershocks continued through to 5 p.m.
The temblor forced Cosmo Oil to shut its 220,000 barrel-a-
day refinery in the city of Chiba, near Tokyo, after a fire
started at the facility’s storage tanks, said Yusuke Kanada, a
company spokesman. JX Nippon’s three plants that closed have a
combined processing capacity of about 600,000 barrels daily.
Japan consumed 4.42 million barrels a day of oil in 2010,
according to data from the International Energy Agency’s Feb. 10
Monthly Oil Market Report. China used 9.39 million barrels and
the U.S., 19.25 million, the agency said.
Oil fell after the U.S. Labor Department said yesterday
that jobless claims increased by 26,000 to 397,000 last week
from a three-year low. Economists forecast they would climb to
376,000, according to the median estimate in a Bloomberg survey.
An Energy Department report on March 9 showed crude
stockpiles rose 2.52 million barrels to 348.9 million last week.
A 1 million-barrel increase was forecast by a Bloomberg News
Analysts surveyed by Bloomberg News were split over the
direction of crude oil prices next week amid spreading unrest in
the Middle East and signals the global economic rebound is
Fifteen of 36 analysts, or 42 percent, forecast crude will
advance through March 18. Fifteen predicted futures will
decline. Six said there will be little change.
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Continue reading here: Oil Plunges as Japan’s Refiners Shut Plants After Earthquake – Bloomberg
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