Oil Surges After Iran Downs U.S. Drone and Fed Signals Rate Cut

• Oil rose after Iran said it shot down a U.S. spy drone in its airspace, stoking Middle East tensions further after the attack on two tankers last week, while a more dovish stance from the Federal Reserve lifted financial markets.
• Futures climbed as much as 3.3% in New York.
• The reported drone drowning follows a missile strike by Yemeni rebels overnight on Saudi Arabia.
• The Fed’s readiness to lower interest rates for the first time since 2008 boosted stock markets and weakened the dollar, spurring demand for commodities priced in the U.S. currency.
• Oil also gained after U.S. government data showed inventories declined by 3.1 million barrels last week, more than analysts had estimated.

(Source: Bloomberg