Updated at: 0216 PST, Saturday, March 12, 2011
NEW YORK: Crude oil prices slumped Friday after a record earthquake slammed Japan, the world's third-largest economy, raising fears of a shock to the global economic recovery.
Traders eyed lower consumption in Japan, the world's third-largest oil importer and consumer, after a week of worrying about prices jumping due to Middle East instability.
New York's main contract, light sweet crude for April delivery, closed $1.54 lower at $101.16 a barrel. In London, Brent North Sea crude for April settled at $113.84, down $1.59.
Financial markets were shaken after the powerful 8.9-magnitude earthquake -- the seventh biggest in history -- hit Japan Friday, unleashing a tsunami that battered Japan's northeast coast and stretched across the Pacific.
"The demand for oil (in Japan) could be lower, at least temporarily, because of the earthquake," said Commerzbank analyst Carsten Fritsch.
"After China and the US, Japan is the world's third biggest consumer of commodities and is dependent on imports for virtually all commodities."
The temblor automatically shut down operations at Japan's nuclear reactors and the government declared a state of emergency at a nuclear power plant in Fukushima.
"The tragedy in Japan is probably near-term bearish as imports are interrupted and the market sheds risk," analysts at BMO Commodity Products Group said in a client note.
However, they noted, "longer term demand will probably increase if nukes remain offline." (AFP) |
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