Oil prices calm as markets mull Iran missile test
New York (AFP) July 9, 2008
Oil prices held steady Wednesday after two days of sharp declines, as news that Iran tested a long-range missile capable of hitting Israel pushed up prices temporarily.
The market shook off news of another slump in US oil inventories and also digested a pledge by the Group of Eight leaders to make the oil market more transparent to help stabilize supplies and investment.
New York's main oil contract, light sweet crude for August delivery, rose a penny to settle at 136.05 dollars per barrel.
London's Brent North Sea oil for August gained 15 cents to settle at 135.58 dollars.
Prices have tumbled some 10 dollars from record highs a week ago, and analysts say the market remains sensitive to any news with a potential effect on supply or demand.
"The familiar divide remains: sellers are mainly focused on contracting demand as a consequence of faltering economic activity and buyers who are chiefly concerned with rising inflation and future threats to supply," said Mike Fitzpatrick at MF Global.
Prices got a brief boost after the US Department of Energy (DoE) said that American crude reserves fell 5.9 million barrels in the week to July 4. That beat market expectations for a drop of 2.1 million barrels.
Oil producer Iran meanwhile test-fired a missile it said is capable of reaching Israel, angering the United States amid growing fears that the standoff over the contested Iranian nuclear drive could lead to war.
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, state television pictures showed.
Oil prices had nosedived Tuesday as falling global equities and resurgent concerns about an economic slowdown stoked fears about future energy demand.
Also Wednesday, Group of Eight leaders pledged in Japan to improve transparency and the supply and demand balance in the oil market by boosting dialogue between producing and consuming nations.
"In response to the sharp rise in oil prices, we agreed to improve balance in supply and demand through efforts and dialogue by both producing and consuming countries to improve transparency," they said in a final statement following their summit in Japan.
A week ago, oil prices jumped to record highs of almost 147 dollars, further igniting worries about inflation and a global economic slowdown.
Meanwhile, Anglo-Dutch oil giant Shell said Wednesday that it has lifted its force majeure provision on production of 225,000 barrels per day from its offshore Bonga oilfield in Nigeria.
Force majeure is a legal clause allowing producers to miss contracted deliveries because of circumstances beyond their control.
Shell declared force majeure at Bonga last month, for exports in June and July, after militants attacked the facility.
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Washington (UPI) Jul 9, 2008
Since the 1990-1991 unraveling of communism in Eastern Europe and Eurasia, countries liberated from socialist state planning have sought to convert their centrally planned economies into market ones, with varying degrees of success. To assist in the process they often have sought Western advice, but such assistance often has come at a high social price, as free market "shock therapy" frequently impacts the poorest elements of society, which in turn can lead to social unrest.
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