Crude oil rose as the operators of Japan’s crippled nuclear plant moved closer to restoring power to critical cooling pumps and as unrest spread in the Middle East and North Africa. Oil climbed as much as 1.4 percent as Tokyo Electric Power Co. said it expects to restore power to the buildings housing the plant’s first four reactors at the Fukushima Dai-Ichi plant later today, a step toward getting cooling systems working again. Prices have risen 13 percent this year as turmoil spread from Tunisia and Egypt to Libya, Yemen, Bahrain and Syria. “There are worries about the Middle East and increasing optimism out of Japan,” said Tom Bentz, a broker with BNP Paribas Commodity Futures in New York. “The oil market has withstood the Japan crisis and we have seen some positive economic data. The recovery of the financial markets since the earthquake is also giving us strength.” Crude oil for April delivery increased $1.37, or 1.3 percent, to $103.70 a barrel at 11:18 a.m. on the New York Mercantile Exchange. April futures expire today. The more-active May oil contract advanced $1.16, or 1.1 percent, to $104.25. Brent oil for May settlement rose 58 cents, or 0.5 percent, to $115.54 a barrel on the London-based ICE Futures Europe exchange. A March 11 earthquake, Japan’s strongest on record, triggered a tsunami that killed thousands and damaged the reactors at the Fukushima Dai-Ichi plant. Short-Term Drop “The recent tragic events in Japan will result in a sharp short-term drop in economic activity but is likely to be followed by a strong recovery driven by reconstruction and replacement of durables which would boost the demand for many commodities,” Societe Generale’s analysts led by Michael Wittner in New York said in the report dated yesterday. Japan is likely to see a rebound in the second half of this year after a blow that will be determined by the magnitude of electricity disruptions caused by the earthquake and tsunami, a Bloomberg News survey of economists showed. Japan’s refineries are processing more oil than expected, Vienna-based researcher JBC Energy GmbH said. The earthquake shut six refineries totaling about 29 percent of the country’s processing capacity, Bloomberg calculations based on Petroleum Association of Japan data show. Three of the plants remain closed, JBC analysts led by David Wech said today in a note. “Japanese refiners are processing more crude than was previously expected, which is supportive for the market,” said Hamza Khan, an analyst with the Schork Group Inc., a consulting company in Villanova, Pennsylvania. Libyan Air Attacks U.S. Defense Secretary Robert Gates said the intensity of the military campaign in Libya will ease soon after allied forces imposed a no-fly zone on Muammar Qaddafi’s regime, enabling rebels to push out of their Benghazi stronghold. The fighting “should recede in the next few days,” Gates said at a press conference in Moscow today. Opposition fighters advanced on the central gateway city of Ajdabiya, which is held by loyalist troops, according to the Associated Press. Qaddafi’s army units continued to shell the western, rebel-held city of Misrata for a second day, residents said. “The market is probably stuck in a $100-to-$105 range until things get a lot worse in Libya or a lot better in Japan,” said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

Source