Oil rose more than 3% toward $64 a barrel on Thursday after Iran shot down a U.S. military drone, raising fears of a military confrontation between Tehran and Washington.

West Texas Intermediate graph

Expectations that the U.S. Federal Reserve could cut interest rates at its next meeting, stimulating growth in the world’s largest oil-consuming country, and a drop in U.S. crude inventories also supported prices.

Brent crude graph

Brent crude, the global benchmark, was up $2.06 at $63.88 a barrel at 1335 GMT, having earlier gained 3.4% to $63.93. U.S. West Texas Intermediate crude rose $2.33 to $56.09.

via Reuters