Many markets were trying to put the nuclear risks in perspective, yet comments from EU Energy Commissioner Guenther Oettinger caused a surge of panic across the entire spectrum of the global market place. Traders ran for cover when he said that, "The situation at the Japanese reactor is effectively out of control" and "there could be catastrophic events within the coming hours."
The markets came back quickly after the comments when traders realized that he was not privy to any information that the rest of us were not. Now some criticized him for those comments thinking they caused undue stress in the marketplace, yet others are more critical of the Japanese for not being more forthcoming. The U.S., China and Europe all to one degree or another are unhappy with the way Japan has released information and underplayed the risks. Risks that until the nuclear situation is under control are still undefined.
The AFP reports that, "China on Thursday urged Japan to release ‘timely and precise’ information on its unfolding nuclear crisis, amid growing Chinese fear of radioactive contamination from its stricken neighbor. ‘We hope the Japanese side will release information, as well as its evaluation and prediction of the situation, to the public in a timely and precise manner,’ foreign ministry spokeswoman Jiang Yu said."
As we look beyond the pressing nuclear issues, the ramifications for oil are obviously very bullish in the long-run. The world is putting nuclear power on hold. Bloomberg News reported that, "Chancellor Angela Merkel said she doesn't plan to close all of Germany's nuclear reactors as a result of the atomic crisis in Japan. Merkel, in a speech to lower-house lawmakers in Berlin, said her decision to close Germany's seven oldest nuclear plants for three months while checks are carried out on the industry is guided by the principle of ‘safety first.’ ‘I'm against shutting down our nuclear power plants only to have atomic power imported to Germany from other countries,’ Merkel told lawmakers as she outlined her government's response to the crisis in Japan. ‘That won't happen on my watch.’”
China also said that they would suspend nuclear power plants approvals. This will increase the demand for oil as well as natural gas. Today we get the natural gas report and expect some fun because of the April crude option expiration! Happy St. Patrick's Day!
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.