Oil prices surged over 4% overnight, responding to an Israeli retaliatory strike on Iran. The attack was a retaliation for a massive missile and drone barrage launched at Israel by Iran last week. Such tit-for-tat exchanges greatly boosted the risk of miscalculation and a direct all-out war between Iran and Israel, given that Iran has warned that it will respond immediately to any Israeli strike on its territory.
However, Iran not only did not respond, but its officials also kept playing down the incident in the media, saying that that all drones were shot down, and no damage was recorded. They also strongly hinted that Iran will not retaliate for overnight strikes. As the situation did not escalate further, markets began to erase overnight moves. Nevertheless, this is a developing story and lack of Iranian response today does not mean that there won't be any over the coming weekend or later.
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Open account Try demo Download mobile app Download mobile appTaking a look at OIL chart at H1 interval, we can see that price spiked above $90 per barrel overnight, to the highest level since Tuesday morning. However, the gains were erased almost as quickly as they were made. OIL is now trading 0.3% lower on the day and is testing short-term support zone in the $86.50 area.
Source: xStation5
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