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Oil rises on US economy, demand signs
October 2, 2010, Saturday
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Oil prices rose yesterday on mixed global economic news from China and the United States. A weaker dollar also played a role.
Benchmark oil for November delivery added US$1.61 to settle at US$81.58 a barrel on the New York Mercantile Exchange. It's the first time the price has topped $80 a barrel since early August.
A survey showed Chinese manufacturing growth picked up its pace last month, which was an indication that its economic recovery was on track.
In the United States, the Institute for Supply Management said its manufacturing index indicated an expansion in factory activity was slowing. Other reports showed personal income and spending both rose more than expected in August.
A drop in commercial crude inventories of 500,000 barrels last week, announced by the Energy Information Administration on Wednesday, also boosted investor optimism. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast an increase of 2.2 million barrels.
"Oil is still riding the wave of the supportive EIA report," Ritterbusch and Associates said in a report. "We still view the US$80 area as the approximate high side of about a US$10 trading range that could remain intact through most of the fourth quarter."
Crude prices have zigzagged in the US$70s for most of the last year, with short-lived peaks above US$80 undermined by an uneven economic recovery in developed countries. Some analysts expect strong crude demand in emerging economies, such as China, will help push prices higher.
"Oil prices slowly but surely appear to be breaking away from the shackles of macroeconomic influence to refocus on market-specific fundamentals," Barclays Capital said.
In other Nymex trading in November contracts, heating oil rose 2.6 cents to settle at US$2.2938 a gallon, gasoline gained 5 cents to US$2.0861 a gallon and natural gas fell 7.5 cents to US$3.797 per 1,000 cubic feet.
In London, Brent crude rose US$1.64 to US$83.75 a barrel on the ICE Futures exchange.
Benchmark oil for November delivery added US$1.61 to settle at US$81.58 a barrel on the New York Mercantile Exchange. It's the first time the price has topped $80 a barrel since early August.
A survey showed Chinese manufacturing growth picked up its pace last month, which was an indication that its economic recovery was on track.
In the United States, the Institute for Supply Management said its manufacturing index indicated an expansion in factory activity was slowing. Other reports showed personal income and spending both rose more than expected in August.
A drop in commercial crude inventories of 500,000 barrels last week, announced by the Energy Information Administration on Wednesday, also boosted investor optimism. Analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos., had forecast an increase of 2.2 million barrels.
"Oil is still riding the wave of the supportive EIA report," Ritterbusch and Associates said in a report. "We still view the US$80 area as the approximate high side of about a US$10 trading range that could remain intact through most of the fourth quarter."
Crude prices have zigzagged in the US$70s for most of the last year, with short-lived peaks above US$80 undermined by an uneven economic recovery in developed countries. Some analysts expect strong crude demand in emerging economies, such as China, will help push prices higher.
"Oil prices slowly but surely appear to be breaking away from the shackles of macroeconomic influence to refocus on market-specific fundamentals," Barclays Capital said.
In other Nymex trading in November contracts, heating oil rose 2.6 cents to settle at US$2.2938 a gallon, gasoline gained 5 cents to US$2.0861 a gallon and natural gas fell 7.5 cents to US$3.797 per 1,000 cubic feet.
In London, Brent crude rose US$1.64 to US$83.75 a barrel on the ICE Futures exchange.
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