Oil prices surged Thursday, rising in step with other perceived riskier assets following hints that the Federal Reserve could cut interest rates in the coming months and on news that Iran shot down a U.S. military drone.
“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.” The attacks come against the backdrop of heightened tensions between the U.S. and Iran following President Donald Trump’s decision to withdraw from Tehran’s nuclear deal with world powers a year ago. The White House separately said it was aware of reports of a missile strike on Saudi Arabia amid a campaign targeting the kingdom by Yemen’s Iranian-allied Houthi rebels.
Meanwhile, the Energy Information Administration reported Wednesday that U.S. crude supplies fell by 3.1 million barrels for the week ended June 14. after two straight weeks of gains. That was more than the 2-million-barrel drop expected from analysts polled by S&P Global Platts.