Crude oil jumped Thursday after Iran shot down a U.S. military drone, prompting President Trump to blast Tehran on Twitter, Kallanish Energy reports.
U.S. West Texas Intermediate crude settled up $2.89, or 5.4%, at $56.65 a barrel, after surging as much as 6% at roughly 10 a.m. ET. Brent crude jumped $2.79, a 4.5% increase, to $64.61/Bbl.
Trump took to Twitter Thursday morning to criticize what U.S. officials said was Iran’s attack on a U.S. surveillance drone earlier in the day, adding Tehran made a “very big mistake.”
Trump said later Thursday he finds it “hard to believe it was intentional.”
Prior to the drone attack over the Strait of Hormuz, the U.S. accused Iran of recent attacks on oil tankers in the Persian Gulf region.
The strained relationship has sent crude prices soaring since more than 20% of the world’s oil output comes from the Middle East. Any threats to the free flow of oil through chokepoint the Strait of Hormuz could lower crude supplies.
Also supporting oil were expectations the U.S. Federal Reserve could cut interest rates at its next meeting, stimulating growth in the world’s largest oil-consuming country.
Also boosting oil on Thursday was a larger-than-expected decline in U.S. crude inventories and the potential for prolonged supply restraints by Opec+.
After surging to near two-year highs, U.S. crude stocks fell by 3.11 million barrels (Mmbbl) last week, compared with analyst expectations for a draw of 1.1 Mmbbl, the Energy Information Administration said Wednesday.
Opec+, which includes most members of Opec, along with a number of non-Opec producers led by Russia, agreed this week to meet July 1-2.
The coalition will discuss whether to extend throughout 2019 a deal on cutting 1.2 million barrels per day of production. The deal expires June 30.
This post appeared first on Kallanish Energy News.