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The surge in US oil prices by more than 5 per cent has been boosted by tensions in Iran and the prospect of the Fed cutting interest rates
Source:Wenhua Finance and Economics
The content below was translated by Tencent automatically for reference.

SMM News: according to foreign news on June 20, U. S. oil prices soared more than 5% on Thursday, this Iran shot down U. S. military drones, arousing concerns about the military conflict between the United States and Iraq.

Expectations of a rate cut at the Fed's next meeting and a decline in dollar crude oil stocks also supported prices.

John Kilduff, a partner at Again Capital Management, said: "several events come together: the interest rate cut cycle is approaching, which will hurt the dollar and boost commodity prices, while tensions between the United States and Iran escalate."

He said that as tensions between the United States and Iraq rise, the security rise in oil prices will rise further.

Brent crude oil futures rose $2.43, or 3.93 percent, to $64.25 a barrel at 1: 13 Beijing time.

U. S. crude oil futures rose $2.93, or 5.45 percent, to $56.69 a barrel. At one point, the contract rose more than 3 yuan in early trading.

Brent crude narrowed to its lowest level since April compared with US crude. Bob Yawger, head of futures at Mizuho in New York, said this was due to a faster rise in US crude prices than Brent crude, driven by the Fed's potential interest rate cut.

Iran's state news agency reported on the 20th that a US RQ-4 unmanned reconnaissance plane was shot by the Iranian military while flying over the airspace of Hormuzgan province in Iran.

The United States said that drones flying in international airspace, "Iran's reports of aircraft flying over Iran is wrong," this is an unprovoked attack on US surveillance assets in international airspace. "

Tensions between the United States and Iran have intensified in recent days. The United States has accused Iran of being responsible for the attack on oil tankers in the Gulf of Oman, which Iran denies.

Concerns about slowing economic growth and trade disputes between China and the US have dragged down oil prices in recent weeks. Brent crude hit a year-high of $75 in April.

Olivier Jakob, an analyst at Petromatrix, said that if tensions between the United States and Iran did not escalate, the prospect of further interest rate cuts would be a more important factor affecting oil prices.

The Organization of the Petroleum Exporting countries (OPEC) and its allies agreed this week to meet from July 1 to 2.

OPEC+ is expected to extend its agreement to cut production by 1.2 million barrels a day. The agreement expires at the end of June.

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