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Oil near $99 as Japan nuclear crisis worsens

Oil near $99 as Japan nuclear crisis worsens

March 15th, 2011 by ALEX KENNEDY, Associated Press in News

SINGAPORE (AP) - Oil prices slid to near $99 a barrel Tuesday in Asia as traders fled risky investments after a third explosion in three days at an earthquake-damaged Japanese nuclear plant triggered a radiation leak.

Benchmark crude for April delivery was down $2.09 at $99.10 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract added 3 cents Monday to settle at $101.19 on Monday.

In London, Brent crude was down $1.96 at $111.77 a barrel on the ICE futures exchange.

The 9.0-magnitude earthquake Friday and ensuing tsunami has also hit demand for oil by shutting down five Japanese refineries - two due to fire. The affected refineries have combined daily capacity of 1.4 million barrels of oil, according to Platts, the energy information arm of McGraw-Hill Cos.

Prime Minister Naoto Kan said Tuesday radiation that has spread from four reactors of the Fukushima Dai-ichi nuclear plant was enough to "impact human health" and the risk of more leaks was "very high." The plant was initially damaged Friday.

Kan urged anyone within 19 miles (30 kilometers) of the plant, some 140,000 people, to stay indoors or risk getting radiation sickness.

Officials said Tuesday they have detected slightly higher-than-normal radiation levels in Tokyo but insisted there are no health dangers.

Japan's benchmark Nikkei 225 stock average plunged as much as 14 percent Tuesday before closing down 10.6 percent after a 6 percent drop Monday.

"We're seeing a knee-jerk reaction due to this fresh explosion," said Victor Shum, an analyst with energy consultancy Purvin & Gertz in Singapore. "It's uncertain how much radiation is coming out or could affect Tokyo and that's caused this across-the-board market reaction."

In other Nymex trading for April contracts, heating oil was down 5.4 cents at $3.01 a gallon and gasoline dropped 10.2 cents to $2.86 a gallon. Natural gas rose 0.7 cents at $3.92 per 1,000 cubic feet.