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Oil surges on improving US, China manufacturing
Source: Agencies |
November 2, 2010, Tuesday
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OIL prices surged yesterday on a series of reports that point to improving economic growth in the United States and China.
Benchmark oil for December delivery rose US$1.52 to settle at US$82.95 a barrel on the New York Mercantile Exchange.
Oil traders were more optimistic after two U.S. reports showed improvement in the manufacturing sector and in construction spending. Both came shortly after China said its manufacturing activity had improved.
The Institute for Supply Management reported yesterday that U.S. manufacturing activity expanded last month at the fastest pace since May. It credited an increase in new orders, particularly for autos and computers, as well as exports.
In addition, construction spending inched higher in September because of an increase in residential activity and government projects that helped offset weakness in commercial projects. Yet, it remained 34 percent below the 2006 peak when residential housing boomed.
China said its purchasing managers index rose in October, a sign that the economy is on track for more stable growth.
The reports were released ahead of two key developments that could affect oil markets: Tuesday's midterm elections in the U.S. and Wednesday's decision from the Federal Reserve on economic stimulus programs.
Many analysts and traders think Fed policymakers will announce a Treasury bond buying program to pump money into the economy. That could push down the dollar which, in turn, would help support oil prices.
Because oil and other commodities are priced in dollars, a weaker dollar means they become more attractive to buyers using foreign currencies.
In other energy trading on the Nymex, heating oil was up 4 cents to settle at US$2.2777 a gallon, gasoline gained 3.35 cents to US$2.0929 a gallon and natural gas fell 20.6 cents to US$3.832 per 1,000 cubic feet.
In London, Brent crude rose US$1.47 to settle at US$84.62 a barrel on the ICE Futures exchange.
Benchmark oil for December delivery rose US$1.52 to settle at US$82.95 a barrel on the New York Mercantile Exchange.
Oil traders were more optimistic after two U.S. reports showed improvement in the manufacturing sector and in construction spending. Both came shortly after China said its manufacturing activity had improved.
The Institute for Supply Management reported yesterday that U.S. manufacturing activity expanded last month at the fastest pace since May. It credited an increase in new orders, particularly for autos and computers, as well as exports.
In addition, construction spending inched higher in September because of an increase in residential activity and government projects that helped offset weakness in commercial projects. Yet, it remained 34 percent below the 2006 peak when residential housing boomed.
China said its purchasing managers index rose in October, a sign that the economy is on track for more stable growth.
The reports were released ahead of two key developments that could affect oil markets: Tuesday's midterm elections in the U.S. and Wednesday's decision from the Federal Reserve on economic stimulus programs.
Many analysts and traders think Fed policymakers will announce a Treasury bond buying program to pump money into the economy. That could push down the dollar which, in turn, would help support oil prices.
Because oil and other commodities are priced in dollars, a weaker dollar means they become more attractive to buyers using foreign currencies.
In other energy trading on the Nymex, heating oil was up 4 cents to settle at US$2.2777 a gallon, gasoline gained 3.35 cents to US$2.0929 a gallon and natural gas fell 20.6 cents to US$3.832 per 1,000 cubic feet.
In London, Brent crude rose US$1.47 to settle at US$84.62 a barrel on the ICE Futures exchange.
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