West Texas Intermediate crude rebounded from its lowest close in more than a week after manufacturing expanded at the fastest pace this year in China, the world’s second-biggest oil consumer. Brent slipped as Libya said one of its ports would reopen.
Futures gained as much as 0.6 percent in New York. China’s Purchasing Managers’ Index climbed to 50.8 in May, the National Bureau of Statistics and China Federation of Logistics and Purchasing in Beijing reported yesterday. Libya’s Hariga port is set to reopen after authorities approved salary payments to Petroleum Facilities Guard members who are preventing crude loadings, according to National Oil Corp.
“The Chinese manufacturing PMI came out better than expected, indicating the continued improvement of the economy,” Michael Poulsen, an analyst at Global Risk Management Ltd. in Middelfart, Denmark, said by e-mail.
WTI for July delivery increased as much as 64 cents to $103.35 a barrel in electronic trading on the New York Mercantile Exchange and was at $102.82 at 12:35 p.m. London time. It closed at $102.71 on May 30, the lowest settlement since May 20. The volume of all futures traded was about 34 percent below the 100-day average for the time of day. Prices are up 4.5 percent this year.
Brent for July settlement erased earlier gains of 0.4 percent to trade 19 cents lower at $109.22 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude traded at a premium of $6.41 to WTI, compared with $6.70 on May 30.
China’s government stepped up the pace of stimulus measures to meet its economic-growth target of about 7.5 percent this year. The PMI for May is the highest since December and surpasses the median estimate of 50.7 in a Bloomberg News survey of economists. April’s level was 50.4, with readings above 50 indicating expansion.
The nation will account for about 11 percent of global oil demand this year, compared with 21 percent for the U.S., forecasts from the International Energy Agency in Paris show.
“The Chinese PMI figure came out a little bit better than expected and that gives the market hope that there might be a steadying process going on with the manufacturing sector and the economy generally,” said Ric Spooner, a chief strategist at CMC Markets in Sydney who predicts investors may sell West Texas contracts if futures advance to about $104.50 a barrel.
In Libya, two tankers are waiting to load at Hariga and the terminal “should reopen soon,” Mohamed Elharari, a spokesman for National Oil, said by phone from Tripoli yesterday. The nation has become the smallest producer in the 12-member Organization of Petroleum Exporting Countries in the past year as unrest disrupted output and shipments.