Oil rises on China’s modest manufacturing growth
The price of oil drifted up to around $93 a barrel as China’s manufacturing growth held steady at a modest pace in November.
By early afternoon in Europe, benchmark U.S. crude for January delivery was up 36 cents at $93.08 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 41 cents to close at $93.68 on Friday.
Chinese manufacturing continued to grow slightly in November, a survey showed, in evidence that growth in the world’s No. 2 economy was continuing, albeit at a modest pace.
HSBC’s purchasing managers’ index released Monday slipped to 50.8 points from 50.9 in October. Although November’s reading was little changed, HSBC said it was the second-highest level in eight months, indicating China’s massive manufacturing industries are improving, though marginally.
China’s leaders are counting on a continuing recovery to avoid the need for further stimulus. China’s economic growth rose to 7.8 percent in the third quarter after slumping to a two-decade low of 7.5 percent in the previous three months.
“The bullish (Chinese) data, combined with the expectation that OPEC will leave its oil production quota unchanged at 30 million barrels per day ... has supported the U.S. benchmark,” said a report from Sucden Financial Research in London.
Delegates from some of the world’s key oil producers, including Saudi Arabia, Venezuela and Nigeria, will meet Wednesday at OPEC headquarters in Vienna.
An estimate from analysts at JBC Energy in Vienna showed OPEC’s crude output fell to 29.44 million barrels a day in November, the lowest since May 2011 and the third straight month with output below 30 million. Most of the difference was attributed to production and export snags in Libya, where political volatility and the effects of the 2011 civil war continue to affect the oil industry.
Meanwhile, Brent crude, a benchmark for international oils, was down 35 cents to $109.34 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline lost 0.5 cent to $2.6623 a gallon.
— Heating oil fell 0.63 cents to $3.0245 a gallon.
— Natural gas shed 3 cents to $3.924 per 1,000 cubic feet.