Crude Oil Price Update. The impact of the Earthquake in Japan on the oil market.-12th March 2011

Oil prices fell on Friday, the 11th of March, following a devastating 8.9 earthquake and tsunami which hit Japan, Friday afternoon in Northeast Asia. Japan is the third largest oil consumer in the world, and the devastating earthquake resulted in the shutting down of oil refineries and other industrial facilities in the country, leading to a massive fall in oil demand. The effect of this decrease in oil demand on the global oil market was also compounded by the recently held OPEC meeting, in which the member countries stated that current production from the cartel was sufficient to fill in the cut in supply from Libya. OPEC stated that their actual production increased by 110,000 barrels per day in February. Furthermore, investors’ fears about supply bottlenecks due to the political unrest raging through the Middle East were further eased when there were only muted protests in Saudi Arabia on Friday in response to the so-called Day of Rage Protests against the monarchy. All of these factors lead to Brent closing at USD $ 113.38 a barrel, whereas West Texas Sour, Midlands closed at USD $ 97.51 a barrel and WTI, Cushing was at USD $ 101.16 a barrel.