NEW YORK: Oil soared more than five per cent higher on Thursday after Iran shot down a US military drone, raising fears of a military confrontation between Tehran and Washington.

The security premium built into oil prices could rise further as tensions between the US and Iran heat up, he said.

Brent crude, the global benchmark, was up $2.40, or 3.9pc, at $64.22 a barrel by 1533 GMT. US West Texas Intermediate crude rose $2.92, or 5.4pc, to $56.68 a barrel. The contract was up more than $3 a barrel earlier in the session.

Brent’s premium over WTI WTCLc1-LCOc1 narrowed to its lowest since April. The move came as US crude rose more quickly than brent due to the tailwind provided by potential Federal Reserve policy, said Bob Yawger, director of futures at Mizuho in New York.

Published in Dawn, June 21st, 2019