Tuesday, March 15, 2011

Japan impact on oil and gas markets


March 15 (Reuters) - Japan's earthquake and tsunami has
roiled energy commodities as risk aversion has rippled through
global markets and traders have moved to gauge the country's
shifting demand for fuel with a quarter of its oil refining
capacity offline and 11 of its 54 nuclear reactors shutdown.

Benchmark Brent crude futures fell by more than 4 percent
on Tuesday after being caught in a broader sell-off on fears
the crisis could turn into a broader tragedy after reports of
rising radiation leakage from the quake-crippled Fukushima

In contrast, U.S. natural gas futures NGc1 have risen by
around 12 cents or 3 percent since the earthquake hit, with
expectations of Japan importing more LNG overriding warmer
weather in the United States. Prices held firm on Tuesday,
despite the near 5 percent drop in crude oil.

Major ports and oil refineries in Japan

Japan's LNG imports from the Atlantic: 2006-2008

Japan's major sources of LNG

Japan's gas oil exports Jan 2009-Jan 2011:

UK gas prices surge on Japan quake:



* U.S. natural gas futures have risen by around 12 cents or
3 percent since the earthquake hit, with expectations of Japan
importing more LNG overriding warmer weather in the United

* Royal Dutch Shell (RDSa.L: Quote) will divert as much LNG as
possible to Japan to make up for energy lost from the country's
nuclear plants, Chief Executive Peter Voser said on Tuesday.

* British wholesale gas prices rose strongly again on
Tuesday, with prices for winter 2011/12 surging to record highs
of 74.85 pence on growing signs Japan's nuclear crisis will
pull LNG away from Europe. The summer 2011 contract also traded
at a fresh record high of 66.25 pence per therm on Tuesday.


* Brent crude prices on Tuesday tumbled 4.5 percent, its
biggest drop in over 13 months, as Japan's escalating nuclear
reactor crisis sparked risk aversion even as clashes in Bahrain
and Libya briefly pulled prices off lows.

* Gulf Coast distillates, including diesel, heating oil and
jet fuel, rose on Friday and Monday on anticipated demand for
the cleanup, recovery and temporary power generators in Japan.
Prices were firm on Tuesday.

* Front-month Asia gas oil cracks held firm at its peak of
$23.41, the highest level in more than three years, as the loss
of refining capacity further boosted the outlook for diesel by
Asia's trading close.

* Fuel oil's viscosity swaps spreads strengthened across
its entire 12-month forward curve on Tuesday, with its April
value closing at $18.88 a tonne, its highest since September,

* Profits from refining Brent crude into naphtha - plunged
$26.05 to $102 a tonne premium, sinking to its lowest in four

* The spread or crack between ICE gas oil and Brent futures
moved to a 26-month high above $17 a barrel as the market
anticipated higher demand for distillates and fuel oil from
other regions in the wake of the Japanese earthquake and

* European low-sulphur fuel oil barge prices rose to
30-month highs on Monday as traders anticipated the country
would need alternative power sources due to nuclear plant


* The premium of Nigerian Qua Iboe to benchmark dated Brent
BFO-QUA stayed near a the 32-month high of around $4 that was
reached on Friday, according to Reuters data.

* The premium on Nigeria's other benchmark Bonny Light over
Brent BFO-BON also hovered around $4, a level last reached in
July 2008.

* Azeri Light, already buoyed by the supply disruption in
Libya, saw its premium to dated Brent BFO-AZR rise further to
around $3.75. The Azeri crude differential has pushed steadily
higher from around $1 in November 2010.

* The differential on Brent to dated Brent BFO-BRT was
just below $1, a level last reached in January this year.

(Writing by David Sheppard; reporting by Nia Williams,
Karolin Schaps, Zaida Espana, Eileen Moustaks, Kristen Hays,
Erwin Seba, Selamawit Gebrekidan and Jasmin Choo; Editing by
Lisa Shumaker)

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