Oil Prices Rise Almost 3% After Drone Attack

• Oil Prices Rise Almost 3% After Drone Attack

Global oil prices rose by almost 3 percent on Thursday following a report that Iran shot down a U.S. military drone.

Brent crude oil, against which Nigerian crude is measured, rose by $1.65 to $63.48 a barrel. While the U.S West Texas Intermediate crude climbed $1.74 to $55.50.

Prices jump as investors fear a military confrontation between Tehran and Washington could disrupt the global oil market.

Also, the likelihood of the US Federal Reserve cutting interest rates boosted investors and businesses expectation of a surge in global oil demand as corporations are expected to increase production with lower rates.

“It’s a combination of factors,” Petromatrix analyst Olivier Jakob said of the price rise. “You have more supportive stocks data, the Fed indicating they will cut rates and the shooting down of the drone.”

Another factor is the unexpected decline in US crude stockpile last week, US crude inventories fell by 3.1 million barrels, more than the 1.1 million projected by experts, the Energy Information Administration reported on Wednesday.