Japan earthquake rattles commodities

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Reuters: Mar 14 2011, 01:38 IST

Thousands of Japanese fled the vicinity of an earthquake-crippled nuclear plant after a radiation leak and authorities faced a fresh threat on Sunday with the failure of the cooling system in a second reactor. The earthquake, of magnitude 8.9, hit commodities prices across the board on fears over its impact on the world’s third largest consumer of commodities. Impact on the energy and commodities sector from Japan’s disaster:

COMMODITIES

w The 19-component Reuters Jeffries CRB commodity price index was down about 0.8%

w The price of gold was pushed higher as a result of the Japan earthquake. Spot gold rose to $1,424.05 an ounce by 1:43 pm EST (1843 GMT), up from $1,412.59 late in New York on Thursday

w US natural gas prices rose to trade at a high of $3.947 on Friday partly on the expectation that higher gas demand in Japan to replace lost nuclear capacity would tighten the global supply/demand balance

w US wheat futures plunged to their lowest in more than three months as the earthquake heightened concerns about the global economy and reinforced a recent pullback in grain prices

w The Tokyo Commodity Exchange said there was no damage to rubber warehouses from the quake

OIL

w US crude oil prices slipped further on the news that a fresh earthquake hit Japan on Saturday. Front-month crude oil futures on the New York Mercantile Exchange traded down $1.76 a barrel by 2:13 pm to $100.94, settling the day at $101.16

w With one-third of Japanese refining capacity shut and ports closed, Wells Fargo Securities

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