* Containment vessel at Japan reactor may be damaged-IAEA
* Bahrain clashes kill 2, scores wounded-source
* Coming up: API oil data at 4:30 p.m. EDT Tuesday
(Updates prices)
By Robert Gibbons
NEW YORK, March 15 (Reuters) - Oil prices fell more than
three percent on Tuesday as Japan's escalating nuclear crisis
sparked risk aversion across markets.
Japan faced a potential catastrophe after a nuclear power
plant exploded and sent low levels of radiation floating
towards Tokyo. []
The deep losses posted early were pared on reports of
violent clashes in Bahrain, where Saudi Arabia sent troops on
Monday, and fighting in Libya that saw further gains by forces
loyal to Muammar Gaddafi's government against rebels.
Brent crude futures for April delivery <LCOc1> fell $3.55
to $110.12 a barrel by 1:58 p.m. EDT (1758 GMT), having earlier
dropped as low as $107.88, its lowest since Feb. 23.
U.S. crude futures for April delivery <CLc1> fell $2.90 to
$98.29 a barrel, bouncing off a $96.71, the lowest price since
$96.31 was hit on March 1.
"It looks like the Japanese economy may be affected for a
longer period than was thought last week," said Gene McGillian,
analyst at Tradition Energy in Stamford, Connecticut.
"And there was record length and that made the market even
more vulnerable to the downside."
McGillian was referring to the record net-long positions in
U.S. crude as of last Tuesday reported by the U.S. Commodities
Futures Trading Commission on Friday. []
JAPAN'S NUCLEAR CRISIS
An explosion on Monday at the Fukushima Daiichi unit 2 in
Japan "may have affected the integrity of its primary
containment vessel," the U.N.'s International Atomic Energy
Agency said. []
Officials in Tokyo said radiation in the capital was 10
times normal by evening but posed no threat to human health.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Japan's unfolding disaster: http://r.reuters.com/mak58r
Japan graphics suite: http://r.reuters.com/quh58r
How a meltdown can occur: http://r.reuters.com/rah58r
Nuclear plants, quakes zones: http://r.reuters.com/qah58r
LIVE COVERAGE
http://live.reuters.com/uk/Event/Japan_earthquake2 Japan quake
rips through commodities, energy:
http://link.reuters.com/bum58r
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
Japanese stocks plunged 10.6 percent, posting the worst
two-day rout since 1987, as concerns grew over the economic
impact of the unfolding disaster. []
Oil demand from Japan, the world's third-largest user, is
likely to decline in the short term as manufacturing and
transport stall but could then rise as the country seeks to
replace nuclear with oil-fired power generation during
reconstruction.
The International Energy Agency (IEA) said global oil
demand was likely to be lower than previously forecast in 2011
as a result of a price shock and trimmed its forecast by 10,000
barrels to 1.44 million barrels per day. []
BAHRAIN CLASHES REPORTED
Oil markets kept a close eye on developments in the Middle
East where Bahrain declared martial law on Tuesday, a day after
Saudi forces arrived in the Sunni-ruled kingdom following weeks
of protests by the island's Shi'ite Muslim majority.
[]
Two men were killed and more than 200 people wounded in
clashes on Tuesday, a hospital source said. []
Opponents of Bahrain's Sunni ruling family called the move
by Saudi Arabia a declaration of war, while Iran denounced it
as unacceptable and the United States urged its nationals to
leave the island, which is home to the U.S. Navy's Fifth
Fleet.
Muammar Gaddafi's forces continued to make advances against
rebels in Libya while world powers failed to agree to push for
a no-fly zone. []
Libya's oil output will take some time to return to normal,
the head of the Libya's National Oil Corporation said, because
some installations were damaged in the fighting. []
(Additional reporting by Nia Williams and Ikuko Kurahone in
London and Alejandro Barbajosa in Singapore; Editing by
Marguerita Choy and Sofina Mirza-Reid)
