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Oil prices advance on positive economic data
Source: Agencies |
December 2, 2010, Thursday
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OIL prices surged yesterday amid positive economic reports in China and the United States and hopes that a plan is in the works to ease Europe's debt problems.
Benchmark oil for January delivery gained US$2.64, or 3.1 percent, to settle at US$86.75 a barrel on the New York Mercantile Exchange.
Oil traders seemed more optimistic about the global economy after sifting through a series of reports that showed improved manufacturing activity in the U.S. and China, increased hiring among small U.S. businesses and higher U.S. work force productivity than initially thought during the third quarter.
At the same time, European Central Bank President Jean-Claude Trichet suggested that the bank could buy bonds by struggling countries within the European Union. That caused the dollar to grow weaker against other currencies. Since commodities are priced in dollars, a weaker dollar makes them more attractive for buyers using foreign currencies.
"The market seems to be kind of reflecting the 'at-the-moment' kind of economic perception," Tradition Energy analyst Gene McGillian said.
Oil has been trading between about US$81 a barrel and near US$86 a barrel in the past week. It began climbing overnight after the state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index rose to 55.2 last month from 54.7 in October.
The survey noted that rising prices for products and materials used in manufacturing remain a concern after inflation hit a 25-month high in October. China, a huge importer of oil and other commodities, has taken steps recently to keep a lid on rising prices and curb growth, which has affected oil prices.
The manufacturing activity "makes it more likely that China will tighten its lending policies, but we knew those measures were likely to be coming soon," Cameron Hanover energy consultancy said in a research note.
In the U.S., the Institute for Supply Management said factory output grew for the 16th straight month in November, though at a marginally slower pace than the previous month. ADP Employer Services said employment at private companies jumped by 93,000 in November as small businesses added the largest amount of workers in three years. And the Labor Department said productivity grew more than expected in the third quarter.
Meanwhile, the Energy Department said commercial crude oil inventories rose by 1.1 million barrels to 359.7 million barrels for the week ending Nov. 26. Gasoline inventories increased by 600,000 barrels to 210.2 million barrels while demand slipped 0.5 percentage point. Inventories of distillate fuel, which include diesel and heating oil, fell by 200,000 barrels to 158.1 million barrels.
In other energy trading, gasoline prices rose as maintenance work cut production at some refineries. PFGBest analyst Phil Flynn said traders were concerned that would cause gasoline supplies to be tighter than anticipated.
In other Nymex trading in January contracts, gasoline added 11.36 cents to settle at US$2.3004 a gallon, heating oil rose 8.12 cents to US$2.4506 a gallon and natural gas gained 8.9 cents to US$4.269 per 1,000 cubic feet.
In London, Brent crude settled up US$3.42 at US$88.87 a barrel on the ICE Futures exchange.
Benchmark oil for January delivery gained US$2.64, or 3.1 percent, to settle at US$86.75 a barrel on the New York Mercantile Exchange.
Oil traders seemed more optimistic about the global economy after sifting through a series of reports that showed improved manufacturing activity in the U.S. and China, increased hiring among small U.S. businesses and higher U.S. work force productivity than initially thought during the third quarter.
At the same time, European Central Bank President Jean-Claude Trichet suggested that the bank could buy bonds by struggling countries within the European Union. That caused the dollar to grow weaker against other currencies. Since commodities are priced in dollars, a weaker dollar makes them more attractive for buyers using foreign currencies.
"The market seems to be kind of reflecting the 'at-the-moment' kind of economic perception," Tradition Energy analyst Gene McGillian said.
Oil has been trading between about US$81 a barrel and near US$86 a barrel in the past week. It began climbing overnight after the state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index rose to 55.2 last month from 54.7 in October.
The survey noted that rising prices for products and materials used in manufacturing remain a concern after inflation hit a 25-month high in October. China, a huge importer of oil and other commodities, has taken steps recently to keep a lid on rising prices and curb growth, which has affected oil prices.
The manufacturing activity "makes it more likely that China will tighten its lending policies, but we knew those measures were likely to be coming soon," Cameron Hanover energy consultancy said in a research note.
In the U.S., the Institute for Supply Management said factory output grew for the 16th straight month in November, though at a marginally slower pace than the previous month. ADP Employer Services said employment at private companies jumped by 93,000 in November as small businesses added the largest amount of workers in three years. And the Labor Department said productivity grew more than expected in the third quarter.
Meanwhile, the Energy Department said commercial crude oil inventories rose by 1.1 million barrels to 359.7 million barrels for the week ending Nov. 26. Gasoline inventories increased by 600,000 barrels to 210.2 million barrels while demand slipped 0.5 percentage point. Inventories of distillate fuel, which include diesel and heating oil, fell by 200,000 barrels to 158.1 million barrels.
In other energy trading, gasoline prices rose as maintenance work cut production at some refineries. PFGBest analyst Phil Flynn said traders were concerned that would cause gasoline supplies to be tighter than anticipated.
In other Nymex trading in January contracts, gasoline added 11.36 cents to settle at US$2.3004 a gallon, heating oil rose 8.12 cents to US$2.4506 a gallon and natural gas gained 8.9 cents to US$4.269 per 1,000 cubic feet.
In London, Brent crude settled up US$3.42 at US$88.87 a barrel on the ICE Futures exchange.
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