SAN FRANCISCO (MarketWatch) — Crude-oil futures gained Wednesday, rebounding after their biggest one-day drop since October as traders monitored the situation at a damaged Japanese nuclear plant and political turmoil in Bahrain.
Crude for April delivery (CLJ11 99.45, +2.27, +2.34%) rose $1.79, or 1.8%, to $98.92 a barrel on the New York Mercantile Exchange.
“It’s a reassessment of what’s happening in Japan,” said Christophe Barret, global oil analyst at Calyon. “Then you have the Middle East, with Saudi Arabia sending troops to Bahrain. It appears to be a dangerous move.”
Crude futures slumped 4% Tuesday in New York after new blasts and fire in Japan’s Fukushima Daiichi power plant prompted Prime Minister Naoto Kan to warn of a “substantial” radiation leak.
The situation at the plant remained fast-changing and precarious Wednesday, with authorities announcing that a second reactor may have ruptured and appeared to leak a cloud of radiation.
The radiation levels around the plant prompted the Japanese government to cancel Wednesday a plan to dump water from helicopters in an attempt to cool off the plant’s overheating fuel rods.
Natural-gas prices continued to rally on expectations that demand for the fuel would rise as Japan imports natural gas, coal, and other sources of fuel to make up for losses in its nuclear energy grip.
The April contract (NGJ11 3.99, +0.05, +1.35%) added 6 cents to $4 per million British thermal units.
Wednesday’s advance in oil prices came as Japan’s Nikkei Stock Average (JP:NI225 9,094, +488.57, +5.68%) climbed almost 6%, after plunging more than 16% in the previous two sessions. Read more about the Tokyo market.
Meanwhile, security forces in Bahrain cracked down on antigovernment protesters early Wednesday, and at least two protesters were killed in the capital Manama, according to witnesses, The Wall Street Journal reported.
Bahrain is under curfew, and on Monday troops from Saudi Arabia and police from the United Arab Emirates heightened fears of sectarian conflict in the island nation.
Meanwhile, gasoline for April delivery (RBJ11 2.87, +0.07, +2.55%) rose 7 cents, or 2.4%, to $2.87 a gallon. April heating oil (HOJ11 3.04, +0.08, +2.75%) added 8 cents, or 2.5%, to $3.03 a gallon.
Closer to home, investors grappled with news the Commerce Department reported construction of new homes plunged 22.5% in February, erasing January’s gains and marking the largest single-month drop in housing starts since March 1984.
Metals traders also took in data indicating higher producer prices, up a seasonally adjusted 1.6% for February as food costs experienced their biggest one-month rise since 1974.
