TORONTO - The Canadian dollar gained traction on Thursday as oil prices headed higher and traders kept a wary eye on the nuclear crisis in Japan. The loonie was up 0.46 to 101.29 cents US. "Markets are attempting to price back in a little risk appetite, though we are obviously still slaves to wire headlines at this point," said Mark Chandler, Head of Canada FIC Strategy at RBC Dominion Securities Inc. Current markets have been volatile this week amid fears of a possible meltdown of a nuclear reactor that was crippled when a 9.0-magnitude earthquake struck off Japan’s northeastern coast Friday. At the same time, investors are trying to figure out what the disaster means for the Japanese economy and how it will affect a global recovery. Analysts say markets are looking to a teleconference of G7 countries later in the day (6 p.m. EDT) to discuss the steep rise of the Japanese yen, which earlier pulled back from a record high versus the U.S. dollar of 76.32 yen. "Some are speculating that it could be an occasion to announce concerted intervention," added Chandler. Oil prices had been trending lower on expectations that Japan, the world’s third-biggest economy, will be using much less oil in the near future. But prices were higher Thursday clashes between security forces — some brought in from Saudi Arabia and other Gulf states — and anti-government protesters in Bahrain. Saudi Arabia is the world’s largest oil exporter, and some analysts are worried the Bahrain unrest could spark an escalation of a conflict between Sunni Saudis and Shiite Iran. The April crude contract on the New York Mercantile Exchange gained $1.90 to US$99.88 a barrel. Metals also headed higher with the May copper contract in New York ahead eight cents to US$4.28 a pound. Bullion prices also rose with April gold up $7 to US$1,403.10 an ounce.

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