Oil prices are up, and could go even higher

Geopolitical tensions with Iran and a potential interest rate cut by the US Federal Reserve sent US markets higher.

Oil prices soared more than five percent on Thursday after Iran shot down a United States military drone, raising fears of a military confrontation between Tehran and Washington.

Also supporting oil prices were a drop in US crude inventories and expectations that the US Federal Reserve could cut interest rates at its next meeting, stimulating growth in the US, which is the world’s largest oil-consuming country.

“It’s a confluence of events: there’s a looming easing cycle which is going to hit the dollar and prop up commodity prices, and there are also the tensions with Iran,” said John Kilduff, a partner at Again Capital LLC in New York.

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Source: aljazeera.com