West Texas Intermediate crude rose to a four-month high after President Barack Obama was said to authorize arming Syrian rebels groups, ratcheting up tensions in a region home to about a third of the world’s oil supply.
Prices capped a second weekly gain after a U.S. official familiar with the decision said Obama is issuing a classified order to the Central Intelligence Agency to provide small arms and ammunition to the Syrian opposition. The official asked not to be identified. Yesterday, the administration said it had confirmed the use of chemical weapons by President Bashar al-Assad’s forces during the civil war.
“We are closing the week out and no one really wants to be short crude oil with escalating tension in the Middle East,” said Bill Baruch, a senior market strategist at Iitrader.com in Chicago. “The least resistance is higher.”
WTI for July delivery climbed $1.16, or 1.2 percent, to $97.85 a barrel on the New York Mercantile Exchange, the highest settlement since Jan. 30. The volume of all futures traded was 28 percent above the 100-day average for the time of day at 4:01 p.m. Prices increased 1.9 percent this week.
Brent for August settlement increased 98 cents, or 0.9 percent, to end the session at $105.93 a barrel on the London-based ICE Futures Europe exchange. Volume was 25 percent below the 100-day average for the time of day.
Brent’s premium to WTI for August delivery widened to $7.86 from yesterday’s $7.56 based on July contracts.
WTI “just broke this year’s high, and the rally is taking on the momentum of itself,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.