Oil amidst turmoil
The Age
Thursday March 24, 2011
THE recent jolt to Japan's economy, by lowering energy demand, has at least temporarily offset the Libyan uprising's impact on oil prices. But experts say there are limits to how long that buffering effect might last.In addition to Japan's nuclear power industry, the earthquake and tsunami damaged nine oil refineries. Many factories and businesses have ground to a halt, and vehicle traffic in Japan's bustling cities has eased. Oil shipments have been curtailed by damage at seaports that will take months to repair.All told, Japanese demand for oil has been reduced by an estimated 1 million barrels a day. That is nearly one-quarter of what Japan imports, and roughly the amount withdrawn from world markets by the unrest in Libya.Oil prices slipped yesterday after Japan announced that it would release 22 days' worth of oil from its reserves to help earthquake-damaged areas. But prices quickly rebounded as reports of unrest in the Middle East upset markets.
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