Oil suffers rough ride on Libya unrest, Japan quake

LONDON, Mar 12 (AFP): Oil endured a roller-coaster ride this week, spiking to 2008 peaks as unrest hit crude exporter Libya, before slumping after a deadly massive earthquake rocked the world's third largest economy Japan. World oil prices began the week by surging to 2.5-year highs on turmoil in large crude exporter Libya. But by the end of the week, New York crude oil had dived back under $100 a barrel as traders bet that a huge earthquake in Japan would slash the country's crude imports. "The demand for oil (in Japan) could be lower, at least temporarily, because of the earthquake," said Commerzbank analyst Carsten Fritsch. "After China and the US, Japan is the world's third biggest consumer of commodities and is dependent on imports for virtually all commodities," he added. More than 1,000 people probably died in the massive earthquake and tsunami disaster, Kyodo News agency said early Saturday. The report came as grim updates indicating appalling loss of life kept emerging from along the hard-hit east coast of northern Honshu island, where the monster wave destroyed more than 3,000 homes. Crude futures also slumped as Saudi Arabia launched a massive security operation in a menacing show of force to deter protesters from a planned a "Day of Rage" to press for democratic reform in the world's biggest oil exporter. Illegal demonstrations were supposed to start after Muslim Friday prayers at noon but as the mosques emptied there were no signs of rallies, with security men manning checkpoints in key locations across several cities. Saudi Arabia, with about a quarter of the world's oil reserves, is a linchpin of security in the Middle East and signs of unrest in the kingdom are being nervously monitored by the United States and other major powers. Ongoing unrest in Libya has almost wiped out production in its key oil sector, slashing output by 1.4 million barrels a day to under 300,000, the head of French oil giant Total said Friday. "Oil production in Libya must have fallen to between 200,000 and 300,000 barrels a day maximum," the chief executive of Total, Christophe de Margerie, told reporters in Paris. "There are about 1.4 million barrels a day less" than normal, since the start of an uprising against Libyan ruler Moamer Kadhafi on February 15 which has led to heavy fighting between his forces and rebels. Margerie's was the most severe estimate yet of the impact of fighting on oil production. The International Energy Agency (IEA) Thursday said output had shot "well below" the official Libyan estimate of 500 thousand barrels per day. Saudi Arabia has said it is committed to the stability of the oil market and to ensuring that oil supplies remain available amid the Libyan unrest. OPEC on Friday warned that high prices could dampen demand later this year, as the oil cartel upgraded only slightly its 2011 world demand growth estimate. By Friday afternoon on London's Intercontinental Exchange, Brent North Sea crude for delivery in April had dropped to $113.50 a barrel from $115.77 one week earlier. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for April, slumped to $99.86 a barrel from $103.45 a week earlier.