Earthquakes may cause global energy prices to rise

On March 14th, Beijing time, the Wall Street Journal published a review article titled "Japan's Earthquake or Lead to Global Energy Prices Rise," and the full text is summarized as follows:

On Friday, Japan suffered a particularly large earthquake and the country’s extensive road network, power stations, and infrastructure were damaged to varying degrees. A number of companies have stopped production and the related losses have been enormous. Some analysts said that in order to support the country's post-earthquake reconstruction, Japan will undoubtedly import more oil, fuel, and natural gas to increase the production of electricity, so as to make up for the shortage of power generated by the shutdown of the nuclear power plant caused by the earthquake. Analysts said that this will put upward pressure on the prices of global energy markets. Earlier, due to the political turmoil in the Middle East and North Africa, global energy prices have soared. At present, market investors are generally concerned about the supply of energy markets.

After the earthquake hit, the cost of natural gas and other fuels for power supply on the market has begun to soar because of reports that the related nuclear power plants in Japan are shut down automatically.

According to the U.S. Energy Information Administration, Japan is currently the world's largest importer of liquefied natural gas. Therefore, analysts pointed out that as the world’s third largest oil importer after the United States and China, as well as the largest importer of thermal coal and LNG, any sudden change in Japan’s energy production will cause great impact on the global commodity market. Impact.

On the Saturday, Tokyo Electric Power Co. suffered a setback due to the closure of the Fukushima Daiichi nuclear power station (Fukushima Daiichi) and the Fukushima Daiichi nuclear power plant (Fukushima Daini), located 260 kilometers north of Tokyo. According to media reports, the nuclear radiation level near the Fukushima Daiichi nuclear power plant has exceeded the warning line.

The U.S. Energy Information Administration said nearly a quarter of Japan’s electricity supply comes from nuclear reactors, and nearly two-thirds of its electricity is supplied by conventional energy sources such as natural gas, oil, and coal. According to the analysis of Japan's past earthquakes, the cost of importing traditional energy will rise after the earthquake. The impact of Japan will have a huge impact on the global LNG and oil markets. In the trading on this Friday, the prices of these energy sources all increased.

According to Vivek Mathur, an analyst at Energy Securities Analysts (ESAI), “Our biggest concern now is to see how many nuclear plants in Japan were shut down in the earthquake and how long it took to shut down.”

Statistics show that before the earthquake in Japan last Friday, oil prices reached a new high in the past two and a half years. However, when a quarter of Japan's refineries were closed, New York's oil prices eventually fell 1.54 US dollars to 101.16 US dollars a barrel. Analysts pointed out that the current market is worried that the extensive destruction of infrastructure will inhibit the market's energy demand. Although the price of oil fell by 3.1% last week, it has now risen by 20% compared to the price of US$84.32 per barrel on February 15, 2011. British oil prices rose by 4% on Friday.

In a report released on Saturday, Barclays Capital said that if natural gas or oil is used to make up for lost nuclear power plant capacity, it means that the daily supply of natural gas will increase by about 1 billion to 1.2 billion cubic feet. The daily supply of oil will increase by 238,000 barrels.