Oil slows advance as Trump U-turns on retaliatory Iran strike

Brent oil pared its biggest weekly gain in four months after President Donald Trump pulled back from retaliatory strikes on Iran for downing a US drone as tensions flare in the Middle East.

Photo: Nabil al-Jurani

Futures erased gains in London on Friday after the New York Times reported that the strike was called off, but are still up 4 percent for the week. Trump said earlier Thursday it was hard to believe the downing of the drone in the Persian Gulf was intentional, suggesting a “loose and stupidindividual may have been responsible. Hostility in the region has escalated recently with a missile strike by Yemeni rebels on Saudi Arabia and the attack on two tankers near the Strait of Hormuz, which the US blamed on Iran.

While crude has rallied on Mideast tensions, an entrenched US-China trade war has dented the demand outlook and weighed on prices over the past two months. Washington and Beijing are set to resume talks next week, providing a glimmer of hope for the global economy. The drone was shot down to send a “clear message” to the White House, an Iranian military officer said, according to a story published by Iranian state-run media on Thursday.

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