Oil nears eight-week high
Oil traded near an eight-week high after economic data from the US and China bolstered optimism that demand is growing in the world’s two largest energy-consuming countries.
Futures advanced 2pc on October 1 after US consumer spending increased more than forecast in August as incomes climbed, a Commerce Department report showed.
Prices also rose as China’s purchasing managers’ index gained in September at the fastest pace in four months.
“The broad sentiment is that a double-dip in the US is looking more and more unlikely,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd in Melbourne.
“Combine that with the strong growth in China, and you’ve got the world’s two biggest oil consumers both looking like they’re in a recovery period.”
The November contract was at $81.63 a barrel, up 5 cents, in electronic trading on the New York Mercantile Exchange at 11:07am Singapore time after reaching $81.87.
It surged $1.61 to settle at $81.58 on October 1, the highest close since August 5, capping the biggest weekly gain since February.
Consumer purchases in the US climbed for a second month, rising 0.4pc and exceeding the 0.3pc gain projected by the median forecast of economists surveyed by Bloomberg News. Incomes were up 0.5pc, the biggest advance this year.
Midwest refiners replenishing inventories after the September 27 restart of Enbridge Energy Partners LP’s Line 6B may extend an eight-week decline in Cushing, Oklahoma, stockpiles, Lawrence Eagles, head of commodities research at JPMorgan, said in a note to clients.
Inventories at Cushing, where the New York Mercantile Exchange crude futures contract is delivered, fell for the eighth consecutive week to 34.3 million barrels in the seven days ended September 24, the Energy Department said last week.
China’s purchasing managers’ index climbed to 53.8 from 51.7 in August, the logistics federation and statistics bureau said October 1. The median forecast from 15 economists surveyed by Bloomberg News was 52.5. Readings above 50 indicate expansion.
Brent crude for November settlement traded at $83.78 a barrel, up 3 cents, on the London-based ICE Futures Europe exchange. It jumped $1.44, or 1.8pc, to $83.75 on October 1, the highest close since May 4.
Money managers including hedge funds and other speculators increased their net-long positions in New York crude futures by 10,583, or 10pc, to 116,906 contracts, according to data from the Commodity Futures Trading Commission.