Oil prices rebound on Chinese data

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Crude oil prices rebounded on Wednesday, helped by strong Chinese manufacturing data and freezing temperatures in Europe, analysts said.

Brent North Sea crude for delivery in January jumped 1.49 dollars to 87.41 dollars a barrel in London trade.

New York's main contract, light sweet crude for January, gained 1.40 dollars to 85.48 dollars.

"Crude oil prices rebounded ... supported by strong Chinese PMI data as well as better than expected manufacturing PMI data from the UK and eurozone," said Sucden Financial analyst Myrto Sokou.

China's factories led a strong pick-up in manufacturing activity across Asia in November, surveys showed on Wednesday.

The HSBC China Manufacturing PMI, or purchasing managers index, rose to 55.3 in November from 54.8 in October.

An official survey released by the China Federation of Logistics and Purchasing (CLFP) also rose to 55.2 in November from 54.7 in October.

A reading above 50 indicates the sector is expanding while the opposite is true below this level.

Energy demand is also being bolstered by plummeting temperatures and heavy snowfall across Europe, Barclays Capital said in a note to clients.

"Some price support has come from estimates of colder-than-normal temperatures in Europe, pointing to strong seasonal demand for heating oil," it noted.

Oil prices slumped about 1.50 dollars on Tuesday as traders booked profits following gains a day earlier.

© 2010 AFP

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