updated 3/14/2011 4:53:17 PM ET 2011-03-14T20:53:17

The devastating earthquake and tsunami in Japan will temporarily take pressure off of tightening global oil supplies as the world's third-largest oil consumer works to rebuild its shaken economy, energy analysts said Monday.

But the disaster won't curb its energy appetite for long. Analysts say Japan will likely boost imports of coal, natural gas, diesel and other refined fuels in coming weeks.

  1. More must-see stories
    1. The Hartford Courant, Political
      Wild Wall St.

      Has the market volatility got you nervous? These cartoons may give you a little comic relief.

    2. Cyber-thieves create fake Kelley Blue Book site
    3. US says Reebok toning shoes don't really
    4. Can you live on $9 an hour? Play the game

"Demand for petroleum products is going to soar," analyst and trader Stephen Schork said.

Benchmark West Texas Intermediate for April delivery added 3 cents to settle at $101.19 per barrel on the New York Mercantile Exchange. It dropped below $99 earlier in the session. In London Brent crude lost 17 cents to settle at $113.67 on the ICE Futures exchange.

Oil prices had been surging in recent weeks because of events 6,500 miles away from Japan, in North Africa. Unrest in Libya forced that country to shut down its oil fields, which had been producing about 1.6 million barrels of crude per day. The squeeze on world supplies and concern that uprisings could spread across the Middle East helped push oil prices about 24 percent higher in the past few weeks. Gasoline pump prices in the U.S. followed oil sharply higher and are still the most expensive ever for this time of year.

Friday's earthquake and tsunami in Japan pulled markets in the opposite direction. Japan imports and consumes more than 4 million barrels of oil per day. Analysts say at least some of that will be reduced as steel plants, auto manufacturers and three of five major oil refineries temporarily shut down.

Some parts of northeastern Japan are still without power, and authorities are trying to stabilize damaged nuclear plants that have been taken off-line.

Japan has increasingly relied on nuclear power as it focused on weaning itself off of petroleum, like other industrialized nations. Of the total 22.3 quadrillion Btu Japan consumed in 2008, 11 percent was generated by nuclear power plants. The U.S. consumed more than four times as much power, about 8 percent of it from nuclear energy.

Analysts think Japan will compensate for the shutdown of its nuclear reactors by relying more heavily on traditional fossil fuels.

It can choose from a variety of sources. Most of Japan's energy is produced by power plants fired by coal, most of it from Australia. It burned 37,500 tons of coal in 2009. Japan also consumed 3.3 trillion cubic feet of liquefied natural gas that year, imported mainly from Indonesia, Malaysia and Australia.

Japan also operates natural gas-burning generators and a number of aging, oil-fired plants that can be cranked up during peak times. The Japanese may favor using more oil instead of natural gas in the short term, according to Michael Lynch, president of Strategic Energy & Economic Research. Lynch said there are more tankers available to deliver crude than LNG and more dedicated facilities in Japan that can accept oil imports.

"Oil is much easier to import," Lynch said. He added that Japan could boost crude imports by about 300,000 barrels per day while its energy infrastructure is hampered by the loss of nuclear power.

Japan's trade minister said Monday that the government will release enough oil from the country's reserves to cover three days of demand, according to Platts, the energy information arm of McGraw-Hill Cos.

Japan imports most of its oil from Saudi Arabia and the United Arab Emirates. Analysts say Japan will try to tap those sources for more oil, and it will look to the U.S. and India for more refined fuels like diesel.

"The U.S. still has a surplus of both gasoline and distillate supplies with which to meet any such upswing in export activity," energy consultant Jim Ritterbusch said.

Natural gas for April delivery gained 2.5 cents to settle at $3.914 per 1,000 cubic feet. Earlier in the day, it climbed to the highest level in a month at $4.053.

Meanwhile gasoline pump prices in the U.S. rose on Monday for the 27th straight day, to a national average of $3.56 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular has increased by 43 cents in the past month and 76.9 cents since a year ago.

In other Nymex trading for April contracts, heating oil added 3.48 cents to settle at $3.0638 per gallon and gasoline futures lost 2.74 cents to settle at $2.9603 per gallon.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Explainer: Overview of Libya's oil resources

  • Image: A Libyan oil worker, works at a refinery inside the Brega oil complex
    AP

    OPEC member Libya is the 17th largest producer in the world, third largest producer in Africa and holds the continent's largest crude oil reserves. It normally pumps around 1.6 million bpd, 85 percent of which is exported to Europe and its output is equivalent to about 2 percent of global oil consumption.

  • Libya's place in the oil producing world

    How the country measures up in crude supplies and production.

  • Exports

    Before the war, Libya was a net exporter with domestic consumption estimated at only around 270,000 bpd.

    Europe was most affected by Libyan oil export disruptions. About 28 percent of Libya's oil went to Italy, 10 percent to Germany, 11 percent to China and France and 3 percent to the United States.

    Libyan oil accounted for about 23 percent of Ireland's oil and about 22 percent of Italy's, according to the IEA.

    Around 13 percent went east of the Suez Canal to Asia.

    The shortfall from the loss of Libyan output was covered by alternative sources such as Nigeria and Azerbaijan, which produce similar light crude oils to Libyan oil.

    Saudi Arabia also brought some it its spare capacity online, according to Saudi sources. The kingdom promised to fill any supply gap caused by the unrest in Libya although it produces heavier crude with higher sulfur content than Libya.

  • Infrastructure

    Reuters

    Oil fields
    Most of Libya's oil fields are located in and around the Sirte Basin, in the northeastern part of the country, which contains around 80 percent of the country's proven reserves.

    Other key areas include the Ghadames Basin, about 240 miles south of Tripoli and Cyrenaica Basin in the northeast and the Murzuq oil field in the desert in the south of the country.

    Libya has five domestic refineries with a combined capacity of 378,000 barrels a day:

    Azzawiya Oil Refining Co
    Sarir Refining
    Sirte Oil Co
    Tobruk Refining
    Ras Lanuf Oil & Gas Processing Co

    Ports
    Libya exported various grades of light crude from six major terminals, five of which are located in the eastern part of the country, where protests erupted near the second city of Benghazi.

    Following are the eastern terminals with pre-war loading volumes in January, 2011 provided by the IEA.

    Es Sider 447,000 barrels per day
    Marsa El Brega 51,000 bpd
    Ras Lanuf 195,000 bpd
    Tobruk 51,000 bpd
    Zueitina 214,000 bpd
    Zawiyah 199,000 bpd (January exports)
    Oother unspecified terminals 333,000 bpd

  • Companies

    Image: Libyan oil worker, works at a refinery inside the Brega oil complex
    AP

    Libya's state company
    Under the Gaddafi regime, Libya’s oil industry was run by the state-owned National Oil Corporation (NOC), which was responsible for managing exploration and production sharing agreements with international oil companies. Along with smaller subsidiary companies, the NOC accounted for around 50 percent of the country's oil output.

    Foreign players
    Major oil companies operating in Libya include:

    BP (Great Britain)
    ConocoPhillips (United States)
    Eni (Italy)
    ExxonMobil (United States)
    Hess Corp (United States)
    Marathon (United States)
    Occidental Petroleum (United States)
    OMV (Austria)
    Repsol (Spain)
    Shell (United States)
    Statoil (Norway)
    Wintershall, a unit of BASF (Germany)

Photos: Gas Turmoil

loading photos...
  1. (Mike Keefe / Denver Post, Politicalcartoons.com) Back to slideshow navigation
  2. (Joe Heller / Green Bay Press Gazette, Politicalcartoons.com) Back to slideshow navigation
  3. (Joe Heller / Green Bay Press Gazette, Politicalcartoons.com) Back to slideshow navigation
  4. (David Fitzsimmons / Arizona Daily Star, Politicalcartoons.com) Back to slideshow navigation
  5. (Nate Beeler / The Washington Examiner, Politicalcartoons.com) Back to slideshow navigation
  6. (R.J. Matson / St. Louis Post-Dispatch, Politicalcartoons.com) Back to slideshow navigation
  7. (John Darkow / Columbia Daily Tribune, Politicalcartoons.com) Back to slideshow navigation
  8. (Kap / Spain, Politicalcartoons.com) Back to slideshow navigation
  9. (Patrick Corrigan / Toronto Star, Politicalcartoons.com) Back to slideshow navigation
  10. (Jimmy Margulies / The New Jersey Record, Politicalcartoons.com) Back to slideshow navigation
  11. (Adam Zyglis / Buffalo News, Politicalcartoons.com) Back to slideshow navigation
  12. (Dave Granlund / Politicalcartoons.com) Back to slideshow navigation
  1. Editor's note:
    This image contains graphic content that some viewers may find disturbing.

    Click to view the image, or use the buttons above to navigate away.

  2. Editor's note:
    This image contains graphic content that some viewers may find disturbing.

    Click to view the image, or use the buttons above to navigate away.

  3. Editor's note:
    This image contains graphic content that some viewers may find disturbing.

    Click to view the image, or use the buttons above to navigate away.

  4. Editor's note:
    This image contains graphic content that some viewers may find disturbing.

    Click to view the image, or use the buttons above to navigate away.

Discuss:

Discussion comments

,

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 4.67%
$30K home equity loan FICO 5.00%
$75K home equity loan FICO 4.36%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 11.09%
11.09%
Cash Back Cards 16.42%
16.42%
Rewards Cards 16.04%
16.04%
Source: Bankrate.com