Oil continues to slip: effect of Japan's natural disaster

Oil continues to slip: effect of Japan’s natural disaster

14-Mar-11

US crude oil prices slipped has fallen, dipping to US$101 on the Nymex. News continues to pour in days after an earthquake and tsunami struck Shendai area of Japan. Energy companies with operations in Hawaii, Alaska and along the California coast including oil refineries were bracing for the possible impact of a tsunami after the Japan earthquake. Oil refineries and power plants on the U.S. West Coast are on guard against the possible tsunami. As one-third of Japanese refining capacity shut and ports are closed, analysts opine that crude oil tankers headed to Japan would be diverted to other Asian refineries. US refinery margins were higher on Friday on expectations that Japan will need product imports. Millions of people spent a third night without water, food or heating in near-freezing temperatures along the devastated northeastern coast. One reason for the loss of power is the damage to at least three nuclear reactors, two of them at the Fukushima Dai-ichi power plant. Containment building of a second nuclear reactor exploded because of hydrogen buildup. More than 10,000 people are estimated to have died in Friday's double-headed tragedy. Over 1,800 people have been confirmed dead, more than 1,400 were missing in Friday's disasters, and another 1,900 were injured. However, it is feared that 10,000 people are likely dead in Miyagi prefecture- (with a population of 2.3 million), was one of the hardest hit areas. In the town of Minamisanrikucho, 10,000 people — nearly two-thirds of the population — have not been heard from since the tsunami wiped it out, a government spokesman said.