WTI oil price ends week trading near $79, two month high

26 June 2010 26 June 2010

BonTrade

WTI Light oil futures end the week’s trading session near the $79 a barrel mark, which is a two month high as oil prices bounce on news that a tropical disturbance in the Caribbean Sea looked more likely to develop into a storm and threaten Gulf of Mexico production.

US Light crude oil futures for August 2010 delivery rose over three percent, to settle at $78.86 a barrel on the NYMEX, the highest settlement since ending at $79.97 on May 5th 2010.

“Today’s price spike appeared to represent a combination of various items that centered around … insertion of storm premium that proved sufficient to ignite some quantity buy stop activity at about the $77.40 area,” said Jim Ritterbusch, president at Ritterbusch & Associates.

“If this storm does become a threat, then the usual pre-holiday buy programs for gasoline will become much more expensive, hence the prompting people to act today, with shorts getting caught up in the mix,” said Michael Guido, associate director/hedge fund coverage at Macquarie Bank in New York.

Meanwhile, support for oil prices also came from the weakening of the US Dollar Index and the euro’s recovery against the US dollar.