Oil jumps after U.S. Navy downs Iranian drone
By Trend
Oil prices rose nearly 2% on Friday as tensions brewed again in the Middle East after a U.S. Navy ship destroyed an Iranian drone in the Strait of Hormuz, a major chokepoint for global crude flows, reports Trend citing to Reuters.
Benchmark crude prices were still on track for their biggest weekly decline in seven weeks, having fallen sharply earlier in the week on hopes for easing Middle East tensions as well as demand concerns and a dwindling storm impact.
Brent crude LCOc1 futures were up $1.17, or 1.9%, at $63.10 a barrel by 0505 GMT. Brent fell 2.7% on Thursday, falling for a fourth straight session, and was set for a weekly drop of more than 5%.
West Texas Intermediate crude CLc1 futures rose 83 cents, or 1.5%, at $56.13 per barrel. They ended 2.6% lower in the previous session, and were headed for a weekly decline of more than 6%.
Indications that the U.S. Federal Reserve will cut rates aggressively to support the economy were also behind Friday’s gains, said Stephen Innes, managing partner at Vanguard Markets.
“The Fed backstop and the report of the U.S. Navy shooting down an Iranian drone are providing a modicum of support for oil markets amidst a very bearish landscape,” he said.
The United States said on Thursday that a U.S. Navy ship had “destroyed” an Iranian drone in the Strait of Hormuz after the aircraft threatened the vessel, but Iran said it had no information about losing a drone.
Also on Thursday, two influential Federal Reserve officials sharpened the public case for acting to support the U.S. economy, reviving bets the central bank may deliver a double-barreled interest rate cut this month.
MAP: Iran's guards say they seized a foreign oil tanker in the Gulf - tmsnrt.rs/32tzK6J
Still, the longer-term outlook for oil has grown increasingly bearish.