MW: Oil rises for sixth day on China manufacturing
Crude-oil futures rose Monday for a sixth-straight session, climbing to their highest level in nearly seven months as China reported its May manufacturing expanded for a third month.
The expansion in manufacturing indicated oil demand from the world's second-largest consumer may increase.
Two competing purchasing-manager indexes released Monday showed Chinese factory activity remained on an uptrend in May. Meanwhile, China also said it will increase gasoline and diesel prices.
Crude for July delivery rose $1.64, or 2.5%, to $67.95 a barrel in early North American electronic trading. It surged to $68.29 earlier, the highest level for a front-month contract since early November.
Oil rallied 30% last month, the biggest monthly gain in a decade, on a weaker U.S. dollar and hopes for an economic recovery. Some analysts, however, were worried that oil's surge was overdone.
"What all these surging markets have in common is that their advances are occurring in spite of uninspiring fundamentals," said Edward Meir, an analyst at MF Global, in a note.
"It seems that for the moment participants are not interested in the bearish dynamics of the market, and instead are pushing values higher on solid technicals and bullish exogenous variables, such as the weaker dollar, firmer equity markets, and improving macro data," he added.
The China Federation of Logistics & Purchasing's version of the PMI saw its benchmark reading fall to 53.1 in May from 53.5 in April, according to data released Monday. The reading marked the third-consecutive month in which the CFLP PMI has held above 50, the level indicating expansion. See full story.
China will increase gasoline and diesel prices by CNY400 per metric ton each, or 19 cents a gallon, effective Monday, an official with a sales unit under PetroChina Co. in northern China said late Sunday.
The move represents increases of around 6% to 7% over current average gasoline and diesel retail-ceiling benchmarks. See full story.
In the U.S., the personal-savings rate jumped to a 14-year high of 5.7% in April as after-tax incomes were boosted by provisions of the economic stimulus plan, the Commerce Department reported Monday. See Economic Report.
Also in Monday's trading, July reformulated gasoline gained 1.61 cents, or 0.9%, to $1.9114 a gallon and July heating oil futures rose 3.94 cents, or 2.4%, to $1.717 a gallon.
Natural gas for July delivery gained 10.4 cents, or 2.8%, to $3.941 per million British thermal units.
In exchange-traded funds, the United States Oil Fund (USO 37.00, +0.60, +1.65%) , the biggest oil ETF, ended at $36.40 Friday.
