17 March 2011 18:01 [Source: ICIS news]
Although crude oil prices in the short term have suffered a negative impact from the earthquake in
Moreover, the country will have to compensate for the power loss left from the nuclear generation and some of it will have to come from oil fired electricity power plants, Lambrecht added.
“Once the nuclear disaster is resolved then reconstruction will begin,” said Harry Tchilinguirian, analyst at BNP Paribas.
When reconstruction begins then there will be an increase in demand for gasoline, fuel for heavy machinery and private power, Tchilinguirian added.
Meanwhile, high levels of radiation at the Fukushima Daiichi nuclear facility are causing further difficulties as attempts continue to stop the six reactors at the site from overheating.
Workers were evacuated as radiation levels are now considered fatal, following a series of explosions at the No 1, No 2, No 3 and No 4 reactors since Saturday. Helicopters are being deployed to continue with cooling operations, pouring seawater onto the reactors.
The International Energy Agency (IEA) estimated
Expectations were of a slight contraction in demand of around 100,000 bbl/day for 2011, but it is likely that due to the reconstruction, demand will be flat and may even increase, Tchilinguirian said.
Meanwhile, crude oil futures were being supported by fears that turmoil in
At 16:50 GMT, Mary Brent was trading at $114.02/bbl, up $3.42/bbl from the previous close, while April WTI was trading at $100.93/bbl, up $2.95/bbl.
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