Oil rebounds on German, Chinese data; Saudi cutback news

23rd October 2014, Comments 0 comments

Oil prices rebounded Thursday from a two-year low in New York on encouraging Chinese and German economic data and reports of Saudi Arabia cutbacks.

US benchmark West Texas Intermediate for December delivery advanced $1.57 to close at $82.09 a barrel on the New York Mercantile Exchange. The WTI futures contract closed Wednesday at its lowest level since late June 2012.

Brent North Sea crude for December jumped $2.12 to settle at $86.83 a barrel in London trade.

"Oil prices saw a strong turnaround today on the news Saudi Arabia cut its crude supply to the market in September, and signs from China and Germany that the global growth situation maybe not as gloomy as expected," said CMC Markets analyst Jasper Lawler.

British banking giant HSBC's preliminary manufacturing purchasing managers index (PMI) for China showed a slight uptick, to 50.4 in October from 50.2 in September, easing concerns about slowing economic growth in the world's largest energy consumer.

Meanwhile, Markit's PMI for Germany rose to 54.3 in October from 54.1 in September, with manufacturing rising at the fastest pace in three months but still well below the levels seen at the start of the year.

The WTI contract also benefited from rallying Wall Street stocks on the back of good company earnings, said Andy Lipow of Lipow Oil Associates.

"Some of it may also be a rebound. We did test $80, within five cents," Lipow said.

On Wednesday the market tanked after the US government reported a large increase in crude-oil inventories, 7.1 million barrels, last week in the United States, the biggest consumer of crude.

"The bearish oil fundamentals verify the slowdown in the US oil demand, following the recent tepid US macroeconomic data," said Sucden analyst Myrto Sokou.

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© 2014 AFP

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