People read information on an electronic screen at a brokerage house in Shanghai June 3, 2008.
(Aly Song/REUTERS)
Oil prices rebounded Wednesday in Asia from a tumble of more than $5 in the previous session after Iran test-fired nine missiles, renewing fears of a conflict that could cut global oil supplies.
Iran's elite Revolutionary Guards fired nine long and medium range missiles Wednesday during war games officials say are a response to U.S. and Israeli threats, state television reported.
Gen. Hossein Salami, a top Guards commander, was quoted as saying the exercise "is to demonstrate our resolve and might against enemies who in recent weeks have threatened Iran with harsh language."
The drill was conducted in the Persian Gulf and the strategic Strait of Hormuz, through which about 40 percent of global oil exports pass, and comes less than a day after Iranian President Mahmoud Ahmadinejad said he sees no possibility of a war with the United States or Israel.
"I assure you that there won't be any war in the future," Ahmadinejad said Tuesday during a visit to Kuala Lumpur, Malaysia. The countries were "focusing on propaganda and psychological war," he said.
Midafternoon in Singapore, light, sweet crude for August delivery was up $1.20 at $136.24 a barrel in Asian electronic trading on the New York Mercantile Exchange. In the floor session Tuesday, the contract fell $5.33 to settle at $136.04 a barrel.
"Iran is certainly sending mixed signals," said Victor Shum at Purvin & Gertz in Singapore. "There was an apparent easing of tensions, but then the missile tests had an impact on prices today."
Tuesday's drop had hurled crude back to levels not seen since June 26. The market's bearish turn this week erases, at least for the time being, part of a run-up that pushed prices past $145 a barrel in a string of record-setting sessions before the Fourth of July holiday.
Analysts attributed much of the sell-off the last two days to profit-taking, saying traders were cashing in on the previous week's gains. A stronger dollar also helped keep prices lower by discouraging investors from pumping more money into commodities.
