Oil markets settle after a brief spike as Iran tests long range missile

10-Jul-08

Oil markets have calmed down after briefly spiking on news that has Iran tested a long-range missile with the ability to hit Israel. The Shahab-3 was among a broadside of nine missiles fired off simultaneously at 8:00 am (0330 GMT) from an undisclosed location in the Iranian desert. New York's main oil contract, light sweet crude for August delivery stood at US$136.05 per barrel. London's Brent North Sea oil for August settled at US$135.58. The market has also absorbed data revealing that US oil inventories have recorded yet another dip as well as a pledge by the Group of Eight leaders to make the oil market more transparent to help stabilize supplies and investment. US Department of Energy (DoE) has reported a fall in American crude reserves by 5.9 mln barrels in the week to July 4, surpassing market expectations of a drop of 2.1 mln barrels. Anglo-Dutch oil giant Shell has lifted its force majeure provision on production of 225,000 bpd from its offshore Bonga oilfield in Nigeria. Shell declared force majeure at Bonga last month, for exports in June and July, after militants attacked the facility.