WORLD oil prices rallied yesterday, partly boosted by positive manufacturing data from China, which is the world’s second biggest energy consuming nation after the United States.

New York’s main contract, light sweet crude oil supply in December from $ 1. $ 03-78. 03 a barrel.

Brent North Sea crude for December delivery was $1. 22 higher at $76. 42 per barrel.

“Robust economic data from China is lending support today,” said Commerzbank analyst Carsten Fritsch.

The HSBC China Manufacturing PMI, or purchasing managers index, was revealed yesterday to have risen to an 18-month high of 55. 4 in October from 55. 0 in September.

A reading above 50 means the sector is expanding, while a reading below 50 indicates an overall decline.

Private China’s official PMI, compiled the National Library Board statistics showed the manufacturing sector rose from 55th 2nd October – the highest level since May 2008 – From the 54th 3 September.

Oil prices also found fresh support by a drop in the value of the US dollar.

The US unit fell against the euro yesterday amid fresh worries about the US financial sector following the bankruptcy of US bank CIT Group over the weekend, traders said.

The weaker greenback makes dollar-priced oil cheaper for buyers using stronger currencies and therefore tends to stimulate oil demand and prices.

In late morning London deals, the European single currency rose to $1. 4772 from $1. 4715 late on Friday.

Traders meanwhile assessed the global economic outlook in the wake of the CIT bankruptcy.

While data released last Thursday showed the United States has emerged from a prolonged recession, consumer spending, which accounts for two-thirds of the nation’s economic activity, fell in September.

“I think the reality is that the economic signals out there have been mixed,” said Victor Shum, a Singapore-based analyst with energy consultancy Purvin and Gertz.

“Last week there was positive US (gross domestic product) but consumer spending was quite negative. ”

Shum added that “even though there are signs of economic recovery, the recovery appears to be on a shaky ground and also somewhat uncertain. ”

U.S. consumer spending fell on Friday, the world’s largest economy and energy consumer for the first time in five months in September.

A day earlier, the Commerce Department said the US economy grew at a seasonally adjusted 3. 5 per cent in the September quarter from the previous three months.

It was the biggest growth in two years as the country emerged from a brutal recession that started in December 2007.


Article Source:China Sourcing Blog

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