By Geoffrey Smith
Investing.com — Oil prices extended losses Wednesday after U.S. President Donald Trump appeared to take near-term military action against Iran off the table in the wake of the attacks on key Saudi Arabian oil installations last week.
Trump said via Twitter that he had “”just instructed the Secretary of the Treasury to substantially increase Sanctions on the country of Iran!” but he made no reference to any possible military response.
Indeed, an earlier tweet suggested that he didn’t see the weekend incident as a real threat to U.S. interests.
“So nice that our Country is now Energy Independent. The USA is in better shape than ever before,” Trump said.
By 9:35 AM ET (1335 GMT), were down at $58.12 a barrel, compared to $58.73 a barrel immediately before the two tweets. The international benchmark was at $63.37, down 1.7% on the day and down from $63.92 before the tweets.
Trump’s comments were quickly followed by a statement from the International Energy Agency also downplaying any sense of supply emergency.
“For now, markets remain well supplied with ample stocks available,” the Paris-based organization said. “IEA member countries hold about 1.55 billion barrels of emergency stocks in government-controlled agencies, which amount to 15 days of total world oil demand. These can be drawn upon in an emergency collective action and would be more than enough to offset any significant disruption in supplies for an extended period of time.”
Oil prices had already fallen steeply on Tuesday, after Saudi Arabian Energy Minister Prince Abdulaziz bin Salman had said the kingdom expects to restore oil production levels to pre-attack levels by the end of the month.
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