Japan’s oil demand to increase due to lack of nuclear

Estimates for the economic impact of the Japanese disaster last month vary considerably, mainly due to uncertainty of the actual cost. The International Energy Agency has acknowledged in its latest […]

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By Tom Gibson

Estimates for the economic impact of the Japanese disaster last month vary considerably, mainly due to uncertainty of the actual cost.

The International Energy Agency has acknowledged in its latest Oil Market Report that both bullish and bearish assessments have been made.

A spokesperson for the IEA said: “the outlook hinges less upon the economy, and more on likely petrochemical and power developments.”

This is due to the country having to cope with the shutting down of 9.7 GW of nuclear capacity.

The report says total product demand could increase slightly in 2011 and even under a more pessimistic scenario, oil demand, rather than decrease, would remain stationary, thanks to the boost from the power sector.

Many have put the cost of the disaster at $100-200 billion, but the Japanese government has estimated that costs could stretch as high as $300 billion.