BINARY TRIBUNE
Both West Texas Intermediate and Brent benchmarks edged higher in early European
trading on Friday after a government and a private report showed China’s
manufacturing sector expanded at a faster pace in October, adding to previous
upbeat economic data from the world’s second-biggest oil consumer. The
persisting lack of resolution to protests in Libya which crippled the country’s
crude production and exports continued to underpinned the market.
On the New York Mercantile Exchange, WTI crude for delivery in December
traded at $96.41 per barrel at 8:10 GMT, up 0.03% on the day. Prices plunged to
$96.24 earlier in the day, near yesterday’s 4-month low, followed by a rebound
to session high of $96.65 per barrel. Light, sweet crude lost 0.1% on Thursday
and settled October 5.8% lower, the weakest monthly performance in a year. The
American benchmark is on track post a fifth weekly decline in a row, the worst
losing streak since June 2012.
Meanwhile on the ICE, Brent futures for settlement in December rose by 0.04%
to $108.89 per barrel by 8:10 GMT. Prices shifted in a day’s range between
$109.35 and $108.74 per barrel. The European benchmark shed 0.7% on Thursday but
extended its weekly advance to 1.6%, set for the best weekly performance in two
months as supply outages in Libya supported prices.
Oil prices inched up on Friday after both a government and a private report
showed China’s manufacturing sector expanded at a faster pace in October
compared to the preceding month, implying robust demand prospects in the world’s
second-largest consumer. The National Bureau of Statistics China reported that
the Asian nation’s manufacturing Purchasing Managers’ Index (PMIPurchasing Managers' Index.
Economic indicators, based on monthly surveys among private sector companies.
Conducted by the Institute of Supply Management in the U.S. and by Markit Group
in over 30 other countries worldwide. Gives information about the economic
health of the manufacturing sector. It is based on five major indicators - 1.
new orders, 2. production, 3. employment environment, 4. inventory levels, 5.
supplier deliveries. Base level is 50. Values above the neutral level indicate
an improvement and below 50 - a worsening in the current state of the
manufacturing sector. It is calculated every month and compared to the
preceding.) rose to an 18-month high of 51.4 in October from 51.1
in September, beating analysts’ predictions for a surge to 51.2. The upbeat
numbers fanned positive sentiment over demand prospects but couldn’t provide oil
with too much of support after oil reserves in the U.S. rose last week for a
sixth consecutive time to the highest in June.
Jonathan Barratt, the chief executive officer of Barratt’s Bulletin in
Sydney, commented for Bloomberg: “The numbers over the past month for China have
all been good but they’ve failed to hold up oil. Inventories keep building;
there’s just too much oil.”
A separate private report by Markit Economics and HSBC showed China’s
manufacturing sector expanded at a faster pace than the preceding month and
matched a preliminary reading. The HSBC China Manufacturing PMIPurchasing Managers' Index.
Economic indicators, based on monthly surveys among private sector companies.
Conducted by the Institute of Supply Management in the U.S. and by Markit Group
in over 30 other countries worldwide. Gives information about the economic
health of the manufacturing sector. It is based on five major indicators - 1.
new orders, 2. production, 3. employment environment, 4. inventory levels, 5.
supplier deliveries. Base level is 50. Values above the neutral level indicate
an improvement and below 50 - a worsening in the current state of the
manufacturing sector. It is calculated every month and compared to the
preceding. surged to 50.9 last month, beating September’s 50.2 and
matching the flash reading.
Despite the slight advance, this was the strongest improvement in operating
conditions in seven months. Output at plants rose for a third consecutive month
and at the quickest pace since April due to stronger domestic and foreign demand
as new orders and export orders surged. The report also marked the strongest
expansion of new business from abroad in a year, supported by increased U.S.
demand. This comes after data earlier in the month showed China’s economy grew
by 7.8% in the third quarter, beating the preceding three months’ 7.5% GDPGross Domestic Product.
Generally measures how big an economy is. It represents the market value of all
products and services produced by an economy for a certain period - monthly,
quarterly and annual. GDP per capita generally represents a country's standard
of living. growth and suggesting the Asian economy will likely
meet the government’s goal for a 7.5% annual economic expansion.
Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research
at HSBC, commented: “The final HSBC China Manufacturing PMIPurchasing Managers' Index. Economic indicators, based on
monthly surveys among private sector companies. Conducted by the Institute of
Supply Management in the U.S. and by Markit Group in over 30 other countries
worldwide. Gives information about the economic health of the manufacturing
sector. It is based on five major indicators - 1. new orders, 2. production, 3.
employment environment, 4. inventory levels, 5. supplier deliveries. Base level
is 50. Values above the neutral level indicate an improvement and below 50 - a
worsening in the current state of the manufacturing sector. It is calculated
every month and compared to the preceding. rose to a seven-month
high in October, with the stronger momentum of manufacturing growth translating
into the first expansion of employment since March. This in turn should support
private consumption growth in the coming months. China is on track for a gradual
growth recovery.”
