By Adedapo Adesanya
Oil prices depreciated by over 3 percent on Wednesday as comments from President Donald Trump calmed tensions surrounding a potential war with Iran.
After the US President’s remarks, Brent crude, the international benchmark, dipped by 2.9 percent equivalent to $2.03 to trade at $66.24 per barrel, while the US West Texas Intermediate (WTI) crude was more affected as it moved down by 3.64 percent equivalent to $2.28 to close at $60.42 per barrel.
Prices went up sharply on Wednesday morning as a result of a retaliatory action from Iran, which fired missiles that struck two bases in Iraq where US troops were camped. However, the gains were short-lived as prices weakened later in the day.
President Trump’s comments later eased the fear of a retaliation on Wednesday evening when he said that he would seek additional economic sanctions, but didn’t specifically say he was going to consider a military action. He said the missiles fired by Iran recorded no human casualty.
“Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world,” Mr Trump said when he addressed the media on Wednesday.
Industry data showed an unexpected weekly climb in US crude stockpiles and this also combined to pull oil prices lower on yesterday. The Energy Information Administration (EIA) showed that US crude supplies rose by 1.2 million barrels for the week ended January 3 as it was unable to drop for the fourth consecutive session.
Previously, analysts poll by S&P Global Platts had forecast a decrease of 3.7 million barrels, while the American Petroleum Institute (API) on Tuesday reported a 5.95 million-barrel decline.
Investors will however be on high alert for any signs of a clash between the United States and Iran that threatens oil supplies in the Middle East despite the comment made by the American president.
Dipo Olowookere