LONDON, Nov 2 — Oil rose above US$77 (RM262) a barrel today, retracing some of the previous session’s drop, as manufacturing data from China helped to allay fears about the pace of the rebound in global energy demand.
HSBC’s China Purchasing Managers’ Index (PMI) rose for the seventh straight month in October, to an 18-month high of 55.4, pointing to sustained strength in the manufacturing sector.
“Bullish China manufacturing data has increased the risk appetite for commodities,” said Michelle Kwek, an analyst at Informa Global Markets in Singapore.
“But there’s still a lot of nervousness in the market because of expectations that there will probably be little or no growth in the US in the fourth quarter as the government winds down stimulus measures.”
US crude for December delivery rose 55 cents to US$77.55 a barrel by 0853 GMT (4.53pm Malaysian time), reversing some of Friday’s loss of US$2.87. Brent crude rose 61 cents to US$75.81.
While China has been a bright spark in the global economic picture, data from other countries has suggested the strength of the recovery was still fragile.
Oil fell 3.6 per cent on Friday, pressured by data that showed weaker US consumer sentiment in October and consumer spending cuts in September, which dashed hopes of a quick rebound in energy demand.
While the US economy has been kick-started into growth, stock investors still face an uncertain outlook as Wall Street gears up for comments from the Federal Reserve and a key report on employment this week.
European stocks were little changed soon after the opening, following on from losses in Asia. The dollar weakened against a basket of currencies.
Worries about the US financial sector resurfaced after CIT Group Inc, a lender to small and mid-sized US companies, filed for bankruptcy yesterday.
Oil reached a one-year high of US$82 in late October. Renewed concerns about the pace of recovery prompted prices to snap four straight weeks of gains and fall 4.3 per cent last week. — Reuters
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