Oil prices rose more than 3% today after Iran shot down a U.S. military drone escalating concern that a war might breakout between the two nations. Trump responded via Twitter Thursday morning to criticize Iran’s attack on a U.S. surveillance drone, saying that Tehran made a “very big mistake.”
“Iran is showing they are still able to rattle oil markets and the downing of a U.S. drone is the latest escalation,” said Edward Moya, senior market analyst at Oanda. “Oil prices are out of bear market territory and appear well supported here.”
Add in that the Federal Reserve is considering interest rate cuts later this year, a decline in U.S. crude inventories and OPEC firming up a date to review their pledged production cuts and suddenly the market has a real bullish twist.
“A decisive pull higher today has now broken above the resistance at $54.85,” said Richard Perry, analyst at Hantec Markets. “This bodes well for the near term outlook. Happy to now support the market, a close above $54.85 would… imply a recovery towards $59.10 in due course.”