**LONDON: Oil prices rocketed higher on Wednesday after US President Donald Trump threatened to shoot at Iranian boats in a key waterway for crude shipments.
Earlier in the day, the European benchmark, Brent North Sea crude for delivery in June, had fallen to $15.98 per barrel — the lowest level since June 1999 as investors continued to worry about oversupply in view of the slump in demand as countries shut much of their economies to slow the spread of the coronavirus.
West Texas Intermediate’s new June contract dropped more than 10 per cent to as low as $10.26.
But prices subsequently rocketed higher, with WTI climbing nearly 40pc at one point to hit $16.18.
“It would be nice for oil’s push higher to come from a less troublesome catalyst,” said Spreadex analyst Connor Campbell.
“Donald Trump’s order for the navy to ‘shoot and destroy’ Iranian gunboats that ‘harass’ American ships causes some investors to return to the black stuff, lifting Brent crude back towards $21 per barrel with a near 8pc comeback.”
The Gulf is a major gateway for oil to reach international markets, and previous spikes in tensions between US and Iranian vessels have seen crude prices similarly surge higher.
The rebound in crude prices came just two days after markets went into freefall with the May contract of US benchmark WTI diving to minus $40 on Monday.
Published in Dawn, April 23rd, 2020