Oil prices fell on Friday after a massive earthquake shook Japan, the world’s
third-largest oil consumer, sending a tsunami sweeping across
the Pacific Ocean and pushing U.S. crude prices below $100.
As the implications for oil demand in the region affected
by the earthquake received attention, investors also monitored
a planned day of demonstrations in top oil exporter Saudi
Arabia and the violence in Libya, where oil exports have been
Brent crude futures for April delivery LCOc1 fell $1.16
to $114.27 a barrel at 12:03 p.m. EST (1703 GMT), having fallen
as low as $112.25.
U.S. crude futures for April delivery CLc1 fell $1.80 to
$100.90 a barrel, having briefly traded at $99.01.
With the earthquake shutting some refineries in Japan,
refiner profit margins for gasoline in the United States
RB-CL=R jumped to $24.96 from $22.76 on Thursday.
The heating oil crack spread CL-HO=R rose to $26.43 a
barrel from $25.18 on Thursday.
Brent’s premium to the U.S. benchmark West Texas
Intermediate crude CL-LCO1=R rose 63 cents to $13.18 a
barrel, after falling below $8 this week and reaching a record
above $17 last week.
Metals and soft commodities also fell.
Japan was hit by a magnitude 8.9 earthquake, the largest
since observations began in the late 19th century.
While the full extend of damage was still being assessed,
analysts said the images and reports so far did not suggest a
major economic and financial disaster.
“Crude oil futures have fallen sharply as a sizable portion
of Japan’s oil refinery capacity has been shut due to the
earthquake and tsunami. Data from China showing higher
inflation also added pressure,” said Joe Posillico, broker at
MF Global in New York.
Posillico said the question going forward would be, “how
long Japan’s crude oil demand will be affected.”