CM: Oil Gains as China's Factory Output Rises Above Expectations; Gold Rises as Dollar Falls
Oil is higher in early morning trade, lifted by a surge in China's factory output that beat expectations. The official purchasing managers' index rose 54.7% in October from 53.8% the previous month, while the HSBC PMI rose to 54.8% from 52.9%, giving hopes to investors that the Chinese economy will continue to pull global growth forward.
Gold too is on the rise as the dollar continued to fall against major currencies, increasing its demand as an alternative asset.
At 0755 ET, Brent crude is up nearly 1.0% at $83.94 a barrel, while light sweet crude is up 0.9% at $82.14 a barrel, and natural gas is surging 2.1% at $4.12 a million British thermal units.
Gold is up 0.3% at $1,361.80 an ounce, while silver is up 1.6% at $24.96 an ounce, and copper is up 1.2% at $3.79 a pound.
Speculation continues that Exxon Mobil Corp ( XOM ), Royal Dutch Shell plc (RDSA) and Occidental Petroleum Corp ( OXY ) are being considered by Abu Dhabi as potential partners to develop its Shah natural gas projected estimated to be worht about $10 billion. The project's original foreign partner ConocoPhillips withdrew from the project in April.
Meanwhile, Royal Dutch Shell is expected to start drilling in two shale blocks in southwestern China by the end of 2011, according to its vice president for exploration in Asia, Marc Gerrits.
Baker Hughes Inc ( BHI ) reported third quarter earnings results that beat analysts' estimates as the oilfield services company strengthened its unconventional oil and gas drilling in North American basins.
In the mining sector, Harmony Gold Mining Co ( HMY ) said it will boost output outside of South Africa due to rising costs and labor intensive production in the country's underground mines. The company expects to produce 40% to 45% of its gold to be produced in other countries within the next seven years, according to Bloomberg. Currently, 92% of its gold comes from South Africa.
