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WSJ:OIL FUTURES: Crude Futures Rise Slightly On China PMI, Weather Concerns
 
By Max Lin
Of DOW JONES NEWSWIRES

SINGAPORE (Dow Jones)--Crude-oil futures rose 0.3% in Asia Thursday on the back of recovering economic activity in China and the likelihood of production disruptions in the U.S. Gulf as a hurricane crosses the Atlantic.

On the New York Mercantile Exchange, light, sweet crude futures for delivery in October traded at $89.05 a barrel at 0700 GMT, up $0.24 in the Globex electronic session. October Brent crude on London's ICE Futures exchange rose $0.13 to $114.98 a barrel.

China reported its official Purchasing Managers Index rose to 50.9 in August compared with 50.7 in July, indicating growth in manufacturing activity rebounded despite Beijing's monetary tightening. The data point reversed early losses for oil.

Meanwhile, Hurricane Katia formed in the Atlantic. It and a tropical wave approached production platforms in the Gulf, with Anadarko Petroleum Corp. (APC) and BP PLC (BP) evacuating some nonessential workers, while Royal Dutch Shell PLC (RDSA, RDSA.LN) said it was also preparing for such an eventuality.

"China's August PMI data are strong and that's why the market is going up now," while weather systems in the Gulf also offer support, said Tokyo-based commodity derivative sales manager Ken Hasegawa at Newedge Japan.

However, analysts doubted whether Nymex oil bulls have the strength to conquer the psychological level of $90 a barrel in the face of persistent economic woes in Europe and the U.S.

"A continued highly vulnerable macroeconomic environment still leaves open the possibility of a sharp and fast price plunge capable of negating the recent price upswing in a matter of a couple of sessions," trade advisory firm Ritterbusch and Associates said in a report.

The U.S. is due to release its official non-farm payrolls report for August, and a bearish reading could prove to be a "possible trigger behind a renewed 'risk off' phase across the financial and industrial commodity spectrum," Ritterbusch said.

"I still think Nymex will trade between $85 and $90 a barrel...a rise to $90 will provide chances for profit-taking," said Hasegawa.

Nymex reformulated gasoline blendstock for October--the benchmark gasoline contract--rose 32 points to $2.8795 a gallon, while October heating oil traded at $3.0865, 25 points higher.

ICE gasoil for September changed hands at $973.00 a metric ton, down $0.50 from Wednesday's settlement.

-By Max Lin, Dow Jones Newswires; 65-6415-4063; max.lin@dowjones.com

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