Brent Rises From One-Week Low on China Manufacturing

Brent rose from a one-week low after a Chinese manufacturing gauge beat forecasts, signaling increased demand from the world’s second-biggest oil consumer. West Texas Intermediate advanced in New York.

Futures climbed as much as 0.6 percent in London. A preliminary Purchasing Managers’ Index for China from HSBC Holdings Plc and Markit Economics was at 50.5 for September, compared with the median estimate of 50 in a Bloomberg News survey and a final reading of 50.2 for August. The U.S. and Middle East allies bombed Islamic State positions in Syria, an expansion of President Barack Obama’s effort to destroy the group that has seized swathes of Iraqi territory.

“We don’t see a hard landing in China this year,” Frank Klumpp, an analyst at Landesbank Baden-Wuerttemberg, said by phone from Stuttgart, Germany. “Even if we get some negative surprise from China, the demand side is less important for the market now than the supply side.”

Brent for November settlement gained as much as 62 cents to $97.59 a barrel on the ICE Futures Europe exchange and was at $97.47 at 12:51 p.m. London time. It fell $1.42 to $96.97 yesterday, the lowest close since Sept. 15. The volume of all futures traded was about 21 percent below the 100-day average for the time of day. Prices have declined 12 percent this year.

WTI for November delivery rose as much as 84 cents, or 0.9 percent, to $91.71 a barrel in electronic trading on the New York Mercantile Exchange. The October contract expired yesterday at $91.52, down 1 percent at the lowest close for front-month futures since May 2013. The U.S. benchmark crude was at a discount of $5.91 to Brent on ICE.

Chinese Economy

In China, the so-called flash PMI indicated that export demand may be helping China’s economy withstand a property slump, easing pressure on the government for more loosening measures.

“The PMI data reduces concern in the market that crude demand in China will be affected by slowing growth,” said Hong Sung Ki, an analyst at Samsung Futures Inc. in Seoul. “For today, this will be the supporting reason for higher prices.”

China will account for about 11 percent of global oil consumption this year, compared with 21 percent for the U.S., according to the International Energy Agency in Paris.

Gasoline Supplies

U.S. gasoline stockpiles probably slid by 300,000 barrels, a second weekly decline, to 210.4 million barrels in the week ended Sept. 19, according to a Bloomberg survey before data from the Energy Information Administration tomorrow. Distillate inventories, including heating oil and diesel, are projected to have increased by 350,000 barrels, while crude supplies may have expanded by 750,000 barrels.

The American Petroleum Institute in Washington will publish separate supply data today. The industry group collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical arm.

The U.S military and allied nations sent fighter jets, bomber aircraft and Tomahawk missiles against Islamic State targets in Syria in an operation the Pentagon press secretary Rear Admiral John Kirby said was “ongoing” in an e-mailed statement yesterday. Neighboring Iraq is the second-largest producer in the Organization of Petroleum Exporting Countries.

Brent has technical support along its 30-day lower Bollinger Band, data compiled by Bloomberg show. Futures halted an intraday drop yesterday near this indicator, at about $96 a barrel today. Buy orders tend to be clustered around chart-support levels.

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