Crude continues its runup, reaching for $110 in Friday's session as the impending expiration of the August contract, a short squeeze and the desire to cover shorts into the weekend are adding fuel to the fire.
The path of least resistance remains higher, as Wednesday's option expiration allowed volatility—and bullish volatility, at that—to slip back into the market. The high on Thursday was $108.43, and the market experienced a quiet overnight session.
As we head into the weekend, I would not expect to see a switch in direction, and it is more likely that we will see a run at the $110 level. With economic conditions stable, demand worries on the back burner, and crude stockpiles at the lowest level since January, traders have had no reason to sell oil this week.
(Read more: Crude reality: Oil could crimp rally)