WTI crude oil price surges to $89 on traders buying frenzy

29 January 2011 29 January 2011

BonTrade

WTI oil futures end this week’s trading session back over $89 a barrel after oil traders and investors pile back into crude oil on a buying frenzy, with next week set to tick higher still.

WTI Oil Futures – Closing Price

US Light crude oil futures for March 2011 delivery ended the week at $89.30 a barrel on the NYMEX, after several straight day’s of declines, but still $0.19 a barrel higher than last week’s closing price of $89.11.

WTI Oil Price Undervalued

In our article yesterday about the recent sell off in WTI oil futures WTI oil price suggests it’s undervalued WTI crude shot up four and a half percent, one of the biggest daily gains since the oil price spike in the summer of 2008.

Egypt Tensions – Middle East Oil Supply

One of the main factors for WTI’s gain on Friday came out from unrest in Egypt, which could possibly affect Middle Eastern oil supplies.

Recent unrest in Tunisia over rising food prices and high unemployment have also left many people Egypt feeling frustrated and resentful of their leadership.

At least 26 people were killed and more than 1,100 hurt in Egypt yesterday as protesters and security forces clashed during an anti government “Day of Wrath”.

Meanwhile, Egypt’s president Hosni Mubarak dismissed his government and said a new cabinet would be announced later on Saturday.

View Egyptian Protests in a larger map

Egypt – No Internet, No Mobile Phones

Mubarak ordered his troops and tanks into major cities, expanded a night time curfew across the country and dropped a digital blanket of silence by having Egypt’s small number of Internet providers cut off all services after midnight on Thursday. Mobile phone services in Cairo also went dead.

Somehow it look’s like the Egypt issue is far from over and oil prices are set to trade higher next week, with WTI now firm near $90 a barrel, and Brent oil futures primed to trade back over $100 a barrel for the first time since 2008.