Oil jumps 5% on Iran tension, potential U.S. fed rate cut - Reuters

Oil jumps 5% on Iran tension, potential U.S. fed rate cut - Reuters:

Oil soared more than 5% on Thursday after Iran shot down a U.S. military drone, raising fears of a military confrontation between Tehran and Washington.

Expectations that the U.S. Federal Reserve could cut interest rates at its next meeting, stimulating growth in the world’s largest oil-consuming country, and a drop in U.S. crude inventories also supported prices.

“It’s a confluence of events: there’s a looming easing cycle which is going to hit the dollar and prop up commodity prices and there are also the tensions with Iran,” said John Kilduff, a partner at Again Capital Management in New York.

The security premium built into oil prices could rise further as tensions between the U.S. and Iran heat up, he said. 


Brent crude, the global benchmark, settled up $2.63, or 4.3% at $64.45 a barrel. U.S. West Texas Intermediate crude rose $2.89, or 5.4%, to $56.65 a barrel.