Oil prices settle near all-time high

Oil prices closed at more than $77 a barrel, near an all-time high, on Friday on technical buying and news of faster-than-expected economic growth.

The Commerce Department said on Friday the United States economy as measured by the gross domestic product expanded at an annual rate of 3,4% in the second quarter, removing some of the concerns about economic growth that sent oil prices down on Thursday in sympathy with Wall Street’s plunge.

But some analysts discounted the economic growth numbers as a factor in Friday’s rally, noting that the government data was released hours before prices took off. Jim Ritterbusch, president of Ritterbusch & Associates in Galena, Illinois, said technical buying by large investment funds—or predetermined decisions to buy when prices reach certain levels—fuelled Friday’s price surge.

“We’ve got a highly charged market here, and it doesn’t take much of a headline to spark a 5% price move,” said Ritterbusch.

Light, sweet crude for September delivery rose $2,07 to settle at $77,02 a barrel on the New York Mercantile Exchange. The highest-yet settlement price for a front-month contract was $77,03 a barrel, set on July 14 2006.
Reflecting how volatile trading in oil futures has been, oil ended the week up only $1,45 a barrel, or 1,9%, despite rising more than $2 a barrel on two separate days.

Concerns about lower economic growth drove Thursday’s sell-off on Wall Street, when the Dow Jones industrials closed down more than 310 points, analysts said. Oil prices fell 93 cents on Thursday in sympathy with the stock market, analysts said.

In London, September Brent crude gained $1,08 to settle at $76,26 a barrel on Friday on the ICE Futures exchange.—Sapa-AP

Client Media Releases

Call for papers opens for ITWeb Cloud, Data Summit & DevOps Summit 2020
The world awaits Thandi Hlotshana