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Gas Prices Lower in Wake of Japan Quake

Oil prices have dropped today, after an almost three week upward climb, because of a massive earthquake disaster in northern Japan. An earthquake created 10-meter tsunami hit the Japanese coast causing wide spread devastation and refinery closures.
 Gas Prices Lower in Wake of Japanese Quake
 
 
Oil prices have dropped today, after an almost three week upward climb, because of a massive earthquake disaster in northern Japan. An earthquake created 10-meter tsunami hit the Japanese coast causing wide spread devastation and refinery closures.

Oil markets have been volatile recently in response to unrest in Libya and the Middle East. This unfortunate news from Japan, the third largest oil importer in the world, has slowed down the upward oil price hike. Jumping 24 percent since the middle of February according to the Canadian Press, this oil price rise has led to frustration at the gas pump. Factors affecting oil price include Libya’s unrest, which has forced a lot of the country’s oil production to shut down leading to higher worldwide gas prices. Other protests in surrounding countries, such as Saudi Arabia—the world’s largest oil exporter, have market speculators worried about oil production disruptions.

This recent Japanese disaster shut down Japanese refineries, leading to a lower fuel demand for Japan and lower oil prices. Japanese companies affected include JX Nippon Oil and Energy Corp and Cosmo Oil Co. Refineries around Japan have been shut down due to fires or power outages, although damage extent has not yet been determined.

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This impact’s longevity on the oil industry remains undetermined. As the market remains focused on the Middle East, these lower prices may only be temporary.

It is obvious the oil industry is still extremely volatile and can easily be affected by unexpected events. As unrest continues in the Middle East and North Africa, there are probably undetermined repercussions still yet to come.
 
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