WTI higher as Trump threatens to destroy Iranian gunboats

(Sharecast News) - President Trump threatened on Wednesday to destroy any Iranian gunboats that harassed US ships at sea, triggering a so-called 'short squeeze' in US oil futures according to analysts.
The threat came days after the Pentagon claimed that ships from Iran's Islamic Revolutionary Guard Corps Navy took "dangerous and provocative" actions near US Navy and Coast Guard ships in the Persian Gulf.

"I have instructed the United States Navy to shoot down and destroy any and all Iranian gunboats if they harass our ships at sea," the president wrote in a post on Twitter.

Trump did not cite a specific event in his tweet or provide details. The White House had no immediate comment.

Iranian armed forces spokesman said the US should focus on saving its military from the coronavirus.

"Today, instead of bullying others, the Americans should put all their efforts toward saving those members of their forces who are infected with coronavirus," Abolfazl Shekarchi said, according to Iran's semi-official ISNA news agency.

On Sunday, the Revolutionary Guard acknowledged it had a tense encounter last week with US warships in the Gulf, but alleged that US forces sparked the incident.

West Texas Intermediate crude oil futures for June delivery gained on the back of the news, Edward Moya at Oanda said.

"President Trump continues to be active in trying to tweet oil prices higher. Oil will continue to remain heavy on demand fears and will shrug off his latest tweets about filling up the SPR without congressional approval, funding US oil and gas companies, and threats to shoot down any Iranian gunboats that pose a threat," Moya told clients.

"Oil volatility will remain high, as short squeezes will likely deliver excessive rebounds. Now is not the time to be constructive on oil prices. Until headlines flow that key storage hubs are filled, oil majors announce large production cuts, and smaller shale companies go under, oil prices should remain heavy."

As of 1707 GMT, June WTI was trading up by 18.86% at $14.26 a barrel on the ICE, alongside an advance of 5.4% to $20.42 a barrel for similarly-dated Brent futures.