Breaking News
0

Oil Prices Rise After U.S. Takes Down Iranian Drone; Iran Denies Report

CommoditiesJul 19, 2019 10:24AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

Investing.com - Oil prices rose on Friday after U.S. President Donald Trump confirmed that the Navy had shot down an Iranian drone in the Persian Gulf area.

Crude shot up 2% to intraday highs overnight but later pared gains after Iran denied the report.

New York-traded West Texas Intermediate crude futures rose 40 cents, or 0.7%, to $55.70 a barrel by 8:32 AM ET (12:32 GMT), while Brent crude futures, the benchmark for oil prices outside the U.S., gained 62 cents, or 1.0%, to $62.55.

Abbas Araqchi, Iranian deputy foreign minister contradicted Trump’s claim, saying that Tehran had “not lost any drone in the Strait of Hormuz nor anywhere else” and said that the U.S. may in fact have shot down one of its own by mistake.

Tensions remain high in the area where tankers have been attacked amid growing tension between Washington and Tehran over Iran’s nuclear program. The Strait of Hormutz is a key shipping route for oil and conflict in the region runs the risk of restricting oil supply.

Both parties have now also reportedly destroyed each other’s drones and, according to Investing.com’s senior commodity analyst Barani Krishnan, seem ready for further conflict despite also suggesting they want to hold negotiations.

“While few may want to give the U.S.-Iran style of gunboat diplomacy a chance, oil bulls should never be too complacent that there will be no breakthrough here - because on the off-chance there is one, another crude price collapse is very likely,” Krishnan said.

Friday’s gains broke a four-day losing streak but oil remains on track for hefty weekly declines of 7.5% in the case of U.S. crude and 6.3% for Brent.

Oil has remained under pressure since weekly data from the Energy Information Administration showed the U.S. market awash with refined products last week.

Oil has remained under pressure since weekly data from the Energy Information Administration showed the U.S. market awash with refined products last week.

Reports of potential talks between the U.S. and Iran contributed this week to an already sharp decline in oil prices after Hurricane Barry passed without causing as much damage as feared.

The U.S. government said on Thursday that 335,000 barrels of oil a day of output was still shut in, while 9% of production platforms were still unstaffed.

Analysts at consultancy Rystad Energy noted that production outages had peaked at 1.4 million barrels a day and had lasted longer than is usual.

"It wasn't the strength of the storm or wind gusts that led to the outages, but timing and location," they said

Barry's impact peaked on Day 5 at nearly 1.4 million bpd in lost production. In the end, it wasn't the strength of the storm or wind gusts that led to the outages, but timing and location that led to such high outages.

Oil has remained under pressure since weekly data from the Energy Information Administration showed the U.S. market awash with refined products last week.

Oil has remained under pressure since weekly data from the Energy Information Administration showed the U.S. market awash with refined products last week.

Elsewhere Friday, oil services firm Schlumberger (NYSE:SLB) said it expected price to remain "range-bound around present levels", against a backdrop of slowing U.S. production growth and output restraint coordinated by OPEC and Russia.

"We continue to see U.S. shale oil as the only near- to medium-term source of global production growth," it said in a press release detailing quarterly results, "albeit at a slowing growth rate, as (exploration and production) operators continue to transition from a focus on growth to a focus on growth and returns."

In other energy trading, gasoline futures advanced 0.8% to $1.8481 a gallon by 8:36 AM ET (12:36 GMT), while heating oil gained 1.1% to $1.8825 a gallon.

Lastly, natural gas futures slipped 0.1% to $2.285 per million British thermal unit.

Oil Prices Rise After U.S. Takes Down Iranian Drone; Iran Denies Report
 

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email