Commodity Corner: Oil Declines After Japan Quake
A sharp drop in Japanese oil demand following a devastating earthquake and tsunami caused oil futures to dip below $100 Friday.
Crude oil for April delivery settled at $101.16 a barrel, a $1.54 decline from the previous day. Friday's massive earthquake measured 8.9 on the Richter Scale at its epicenter near the east coast of Japan's Honshu island. It led to the shutdown of at least 1.2 million barrels of refining capacity in the world's third-largest country in terms of oil consumption.
Determining when Japan's lost oil demand will recover is difficult given the widespread destruction to transportation infrastructure and power generation facilities in areas ravaged by the temblor and tsunami.
Crude oil traded within a range from $99.01 to $103.00 Friday. Compared to Monday's settlement price., oil is down 4.1 percent for the week.
April natural gas gained six cents to end the day at $3.89 per thousand cubic feet. Friday's higher settlement price stems from speculation that lower demand for gas, coupled with a 13-month low in the U.S. gas rig count as reported by Baker Hughes, will eventually spur demand from industrial natural gas customers.
Natural gas futures peaked at $3.95 and bottomed out at $3.81 during Friday's trading. For the week, natural gas is down one percent.
Front-month gasoline slipped three cents to settle at $2.99 a gallon Friday after fluctuating from $2.94 to $3.03. April gasoline is down 0.3 percent for the week.