Oil rose amid signs of stabilisation in China, the world’s second-biggest user, and as US and OPEC production slowed.
Futures gained as much as 1.5 percent in New York. China’s official manufacturing gauge for September came in at 49.8, above the median 49.7 forecast in a Bloomberg survey. A private gauge also beat estimates. U.S. production declined for the seventh time in eight weeks to a 10-month low. The Organization of Petroleum Exporting Countries produced 32 million barrels a day in September, down 0.7 percent from the previous month.
Oil has plunged more than 25 percent from this year’s closing peak in June amid speculation a global glut that drove prices to a six-year low will be sustained and as China’s economy grows at the slowest pace in a generation. U.S. crude stockpiles remain about 100 million barrels above the five-year seasonal average.
“China’s manufacturing data has at least improved from the previous month, which is a plus factor for oil prices,” Kang Yoo Jin, a commodities analyst at NH Investment & Securities Co. in Seoul, said by phone. “With oil staying below $50 a barrel, there’s a high chance that the U.S. output will continue to fall.”
WTI for November delivery gained as much as 68 cents to $45.77 a barrel on the New York Mercantile Exchange and was at $45.75 at 12:39 p.m. Singapore time. The contract lost 14 cents to $45.09 a barrel Wednesday. The volume of all futures traded was about 53 percent above the 100-day average.
China Manufacturing
Brent for November settlement added 41 cents, or 0.9 percent, to $48.78 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $3.05 to WTI.
China’s official purchasing managers index climbed to 49.8 in September, the National Bureau of Statistics said Thursday, while a private gauge of the country’s manufacturing from Caixin Media and Markit Economics came in at 47.2, also exceeding economists’ estimates of 47. Readings below 50 indicate contraction.
The Bloomberg Commodity Index, a measure of returns for 22 raw materials, gained for a third day. The index lost 14 percent in the quarter ended September, the biggest drop since 2008, amid fears that China’s economy was weakening.
Global Output
U.S. crude production declined 40,000 barrels a day to 9.1 million last week, the least since November 2014, according to Energy Information Administration data.
OPEC cut its output by 233,000 barrels in September, led by Saudi Arabia and Iran, according to a Bloomberg survey of oil companies, producers and analysts. Saudi Arabia, the group’s top supplier, decreased output by 200,000 barrels a day to 10.3 million.
U.S. inventories rose 3.96 million barrels to 457.9 million in the week ended Sept. 25, the EIA said. Supplies at Cushing, Oklahoma, which is the biggest hub in the country, fell by 1.07 million barrels to 53 million, the lowest since March.
Recommended for you
