Crude oil rose for the first time this week after Iran test-fired a long-range missile capable of reaching Israel and the dollar fell.
The missile fired by Iran's Revolutionary Guards Corps as part of war games was "a Shahab 3 with a conventional warhead weighing 1 ton and a 2,000-kilometer (1,240-mile) range," state television Al-Alam said. Iran is OPEC's second-biggest oil producer.
Crude oil for August delivery rose as much as 69 cents, or 0.5 per cent, to $136.73 a barrel in electronic trading on the New York Mercantile Exchange. It traded at $136.70 at 1.34 p.m. Singapore time.
Iran has said it may blockade the Strait of Hormuz, the shipping lane for a fifth of the world's crude, if its nuclear facilities are attacked.
The country has the second-biggest proved oil reserves and is the second-biggest producer in the Organization of Petroleum Exporting Countries.
Brent crude oil for August settlement climbed as much as 72 cents, or 0.5 per cent, to $137.15 a barrel on London's ICE Futures Europe exchange.
Yesterday, it declined $5.44, or 3.8 per cent, to settle at $136.43 a barrel, the biggest drop since March 19th. Prices climbed to a record $146.69 on July 3rd.
Bloomberg