Iran jitters unlikely to stop oil drop
An oil refinery near the southern Iraqi port city of Basra
TEXT OF STORY
Renita Jablonski: Oil prices are around $137 a barrel this morning. Prices have seen a steep decline in the last couple days. This morning the price of oil has ticked-up on some worrying news from Iran. Still, today's move is not expected to totally reverse the recent drop in crude. From London, Stephen Beard has more.
Stephen Beard: Oil rose about a dollar a barrel on the news from Teheran. The Iranians claim to have tested some long and medium-range missiles, including one that could reach Israel.
But jitters about this are thought unlikely to change yesterday's fundamental shift in the market. Oil dropped $5 a barrel. That's the biggest single-day decline since the first Gulf War in the early 90's.
Leo Drollas of the Center for Global Energy says the penny has finally dropped. Demand for oil is bound to fall if the global economic slowdown gathers pace:
Leo Drollas: The general mood is getting more pessimistic. As it should be, actually, because oil at $150 -- as the market was testing -- doesn't make any sense at all, given where the world economy is at the moment and where it's heading.
He believes that after the nervousness over Iran passes, the oil price will fall further.
In London, this is Stephen Beard for Marketplace.