|News||Crude drops near $101 following destructive Japan quake|
|Analysis||Crude traded below $101 per barrel today following an 8.9 magnitude earthquake devastating Japan and accompanied by a tsunami striking the region, triggering refineries to shutdown; KSA protests turn violent.|
Crude today hovers around $101 per barrel recording its highest around $102.97 and lowest around $100.85, while it currently is trading around $101.85 per barrel.
An 8.9 magnitude earthquake struck Japan’s northeastern coast today, triggering a 13-foot tsunami that so far has killed one person; thus, sparking overselling in regional markets and directly impacting oil as traders focused on the downside pressures on growth offset supply woes.
Japan’s Nikkei 225 index dropped 1.7%, while Hong Kong’s Hang Seng index followed shedding 1.6%; in return the dollar yesterday spiked above 83.20 yen before dropping to 82.67 from 82.90.
Crude yesterday traded around $105 per barrel recording its highest around $105.04 and lowest around $100.61 per barrel, closing around $102.54 per barrel. Futures slid yesterday following overselling in regional Asian markets from Japan’s quake as the dollar in return jumped, alongside protests breaking out in OPEC’s largest energy producer and turning violent as Saudi security forces attempt to shutdown demonstrations.
Moreover, the political upheaval spreading throughout the Mid-East has reinforced traders’ fears reaching oil giant producer Saudi Arabia, where pro-democracy activists called for political reform to the monarchy in Riyadh yesterday as security officials attempted to break up protests by firing shots into the crowd killing one person and wounding others. Public demonstrations are prohibited in Saudi Arabia. This recent development in the Kingdom could lead to dire consequences, specifically since it has been using spare capacity to make up for output lost by its fellow OPEC member, Libya.
As for NYMEX as of 04:15 EST; motor gasoline fell $1.07 recording $298.720 per gallon; heating is trading around $302.630 per gallon declining $0.61; whereas natural gasoline shed $0.16 to record $3.824. In London, Brent futures dropped $1.38 to record $115.840.