U.S. oil prices surged nearly 20 percent on Thursday as traders eyed on tensions between the United States and Iran.
The West Texas Intermediate for June delivery rose 2.72 U.S. dollars, or 19.7 percent, to settle at 16.50 dollars a barrel on the New York Mercantile Exchange, while Brent crude for June delivery was up 0.96 dollar, or 4.7 percent, to close at 21.33 dollars a barrel on the London ICE Futures Exchange.
The energy market was partly lifted after U.S. President Trump sent some aggressive tweets on Iran.
“I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea,” Trump tweeted Wednesday.
“Normally oil prices rise on tensions in the Gulf because of fears of supply disruption,” analysts at UBS said in a note Thursday, adding that with the oil market out of balance, “it is doubtful that President Trump’s belligerence will do that much to prices in the near term.”
Oil prices have been under pressure these days amid coronavirus-tied demand shock and a supply glut.
Global oil demand is expected to fall by a record 9.3 million barrels per day year on year in 2020, the International Energy Agency (IEA) warned in its closely-watched monthly report.
The IEA said demand in April is estimated to be 29 million barrels per day lower than a year ago, down to a level last seen in 1995, due to the COVID-19 pandemic as containment measures have brought mobility almost to a halt. Enditem