Oil rally cools as Iranian strike causes no U.S. casualties.

Catogory : Market Report

Oil’s rally faded as the U.S said Iranian airstrikes on military bases in Iraq didn’t cause any casualties, reinforcing speculation that Tehran is opting for limited retaliation over the killing of a top general.

Futures in London initially surged more than 5% as the Islamic Revolutionary Guard Corps claimed responsibility for the missile strikes in Iraq, and held above $68 a barrel on concern of further escalation in the oil-rich region. Yet the gains had largely dissipated by the end of the morning, following a U.S. statement that no personnel had been killed and an early tweet by President Donald Trump that “all is well” following the attacks.

Crude hit a three-month high of almost $72 a barrel immediately after the incident, in which 10 missiles struck the Ayn al-Asad base in western Iraq and another facility in Erbil. The strike followed the killing of Iranian General Qassem Soleimani last week on Trump’s orders. Prices also abated as officials from the Organization of Petroleum Exporting Countries promised to keep supplies flowing to customers. “We are not forecasting a shortage of supply unless we have a catastrophic escalation, which we don’t see,” UAE Energy Minister said in Abu Dhabi. OPEC Secretary-General said he was “confident that our leaders are doing everything possible to restore normalcy. Brent crude rose as much as $3.48 to $71.75 a barrel, before trading 14 cents higher at $68.41 on the ICE Futures Europe exchange as of 12:33 p.m. London time. West Texas Intermediate climbed as much as $2.95, or 4.7%, to $65.65 on the New York Mercantile Exchange, it later slipped to $62.52.