Oil Prices Spike After U.S Navy Takes Down Iranian Drone
On Friday, oil prices rose after the president of the United States, Donald Trump confirmed that the U.S Navy shot an Iranian drone. The drone was taken down in the Persian Gulf area.
This event has pushed crude prices by 2% on overnight but the gains pared after Iran denied the news.
Increased Tensions Mean A Rise In Oil Prices
Brent Crude Futures gained 1.0% and moved to $62.55 while New York-traded West Texas Intermediate crude futures saw a 0.7% increase to $55.70.
The deputy foreign minister of Iran, Abbas Araqchi contradicted the claim made by Trump. The Minister said the country didn’t lose any drone the strait of Hormuz or elsewhere. He went on to say that this may have been a mistake by U.S troops who shot down their own drone.
Tensions are still high after the attack of tankers and this comes at a time when Tehran and Washington squabble over Iran’s nuclear program. Both countries have destroyed each other’s drones at this time and seem ready to continue the conflict despite suggesting negotiations.
The gains on Friday broke the 4-day losing streak of crude oil. However, the commodity still has a long way to go to recover from the 7.5% decline for U.S crude and 6.3% for Brent.
The decline in price after Hurricane Barry ended may have also been caused by reports of potential negotiations between Iran and the U.S. Oil rigs are already preparing to restart production in the Gulf of Mexico next week.
Gasoline futures saw a 0.8% rise and heating oil gained 1.1%.