Oil Drops $4 to Near $97 a Barrel
Oil prices dropped sharply Tuesday, declining $4 to near $97 a barrel on lower demand in Japan due to the big earthquake and subsequent nuclear crisis in that country, Bloomberg reported.
Crude futures fell $4.01, the biggest drop in five months, to close the trading day at $97.18 a barrel on the New York Mercantile Exchange, Bloomberg reported. It was the first time oil closed below $100 since March 1.
Japan’s big earthquake and tsunami Friday have led to subsequent radiation leaks from a nuclear energy plant that is raising concerns that energy demand will slow in that country, the world’s third-largest economy, Bloomberg said.
The decline in nuclear energy use may boost demand in Japan for other fuels, including liquefied natural gas and diesel, for supplemental electricity production, Bloomberg reported.
But the earthquake also disrupted production at oil refineries accounting for almost a third of Japan’s processing ability, cutting demand for crude oil. Japan is the world’s third-largest oil consumer.
Standard & Poor’s spot index of 24 commodities fell 2.4%, capping the longest downward streak since August, Bloomberg said. Gasoline futures fell as much as 4.2%, while gold, copper and corn wholesale prices also declined.
Diesel rose for a 15th straight week, to an average $3.908 a gallon, though its 3.7-cent increase was well below the double-digit gains of the past two weeks.
Gasoline also slowed its recent increases, though it rose 4.7 cents to $3.567 and both fuels are at their highest levels since the record year of 2008, the Department of Energy reported Monday.
