NEW YORK: Crude oil prices rose on Wednesday as concerns about Arab unrest outweighed fears about the threat of a potential nuclear disaster in major crude-importer Japan.
New York's main contract, light sweet crude for April rose 80 cents to close at $97.98 a barrel. The benchmark WTI futures contract had plunged $4.01 Tuesday as Japan raced to avert a nuclear catastrophe at plant stricken by Friday's powerful 9.0 magnitude quake.
In London, Brent North Sea crude for delivery in April jumped $2.10 to settle at $110.62 a barrel. The contract had slumped by $5.15 on Tuesday.
"There are two overriding factors with Japan and the continuing unrest in the Middle East," said Matt Smith at Summit Energy.
The oil market found support from fresh unrest in the Middle East, as forces loyal to Libyan leader Moamer Qadhafi advanced on rebel-held positions and Bahrain saw violent clashes amid a newly declared state of emergency to quell protests.
Popular uprisings in the Middle East and North Africa, which toppled the leaders of Tunisia and Egypt, have been driving oil prices higher on concerns over supply disruptions.
Bahraini authorities launched a crackdown on opposition demonstrators in Manama Wednesday, killing five people, and days after a Saudi-led force moved into Bahrain to bolster the Sunni minority government.
Unrest in Bahrain is "really scaring" the market, Summit's Smith said, noting fears that the turmoil could spread to neighbouring Saudi Arabia, OPEC's largest oil producer.
But the upward swing in oil prices was muted by the growing threat of nuclear disaster in Japan, the world's third-biggest economy, and also the third largest global consumer of crude oil.
Racing to prevent a nuclear meltdown, Japanese crews have been dumping water on the stricken Fukushima No.1 power plant, which has been hit by a series of explosions after Friday's quake and tsunami knocked out reactor cooling systems.
In remarks Wednesday that shook markets, the European Union's energy chief, Guenther Oettinger, warned that "the site is effectively out of control."
"In the coming hours there could be further catastrophic events which could pose a threat to the lives of people on the island," he told European Parliament committee in Brussels.
"The escalation in Bahrain, together with the economic and social consequences in Japan, underscores our view that volatility will remain high and that the market will continue to oscillate between both upside and downside drivers of the oil price," JPMorgan Chase bank analysts said in a client note.
The market also weighed the latest weekly reserves snapshot from the US Department of Energy, showing US crude stockpiles rose by 1.7 million barrels last week, while inventories of gasoline slumped by 4.2 million barrels.
Analysts had forecast a smaller rise in crude of 1.1 million barrels and a drop of only 1.8 million barrels for gasoline in the United States, the world's biggest oil-consuming nation.
Comments
Comments are closed for this article.