Oil dives as U.S., Iran tensions ease and on U.S. crude build - Reuters

Oil dives as U.S., Iran tensions ease and on U.S. crude build - Reuters:

Oil futures fell more than 4% on Wednesday in a wild swing, soaring close to a four-month high in early trade on an Iranian rocket attack on U.S. forces in Iraq before retreating as the countries quickly ratcheted back tensions.

Prices fell as it became evident the rocket attack did not damage oil facilities or harm any Americans, with more pressure coming from a surprise build in U.S. crude stockpiles.

U.S. President Donald Trump backed away from days of angry rhetoric against Iran as the two countries tried to defuse a crisis over the American killing of Iranian military commander Qassem Soleimani.

“The fact that we have this great military and equipment ... does not mean we have to use it,” Trump said in an address from the White House, noting Iran appears to be standing down.

Before Trump’s address, prices were already retreating from overnight highs after tweets by the U.S. president and Iran’s foreign minister signaled at least temporary calm.

Brent futures fell $2.83, or 4.2%, to settle at $65.44 a barrel, their lowest close since Dec. 16. In early trade, the contract hit its highest since mid-September at $71.75.

The global benchmark had been trending higher since hitting an October low of $56.15 per barrel; the session high on Wednesday was 28% above that level.

U.S. West Texas Intermediate (WTI) crude fell $3.09, or 4.9%, to settle at $59.61 per barrel, its lowest close since Dec. 12. The session high of $65.65 was the highest since late April.