Oil prices steadied today after easing slightly from highs prompted by the bombing of a key Iraqi pipeline, the Associated Press reported.

Crude prices, which already spiked by nearly $5 per barrel today because of a weak dollar and lower U.S. fuel inventories, were briefly driven higher by the second bombing in a week in Basra, where Iraqi security forces have been clashing with Shiite militia fighters, before falling back to closing levels.

After rising by more than a dollar and topping the $107 mark, light, sweet crude for May delivery dropped 8 cents to $105.82 per barrel in early trading on the New York Mercantile Exchange. The contract increased $4.68 to settle at $105.90 yesterday.

Comments from Iraq Oil Minister Hussein al-Shahristani, who said that ongoing clashes would not affect oil exports and drilling operations, apparently reassured the market. But with an average of 1.54 million barrels a day transiting the southern city last month, an official demanding anonymity acknowledged that the blast could affect crude sales.

On average, Iraq produced 2.4 million barrels of oil per day in February. Exports averaged 1.93 million barrels per day during that month. Basra Rumaila South and North oil fields produce around 1.3 million barrels per day.