IV:Crude oil inches higher after China PMI report, Italy elections eyed
Investing.com - Crude oil futures inched higher during European morning hours on Monday, as markets digested data showing manufacturing activity in China expanded at the slowest rate in four months in February, but remained in expansion territory.
Investors also eyed the outcome of a closely contested election in Italy.
On the New York Mercantile Exchange, light sweet crude futures for delivery in April traded at USD93.42 a barrel during European morning trade, up 0.3% on the day.
New York-traded oil prices held in a tight trading range between USD92.97 a barrel, the daily low and a session high of USD93.57 a barrel. Nymex prices fell to as low as USD92.49 on Friday, the weakest level since January 4.
Data released earlier in the day showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to a four-month low of 50.4 in February from a final reading of 52.3 in January.
The measure however still remains above 50.0, indicating an expansion in manufacturing activity.
China is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand and manufacturing numbers are often seen as indicators for future fuel demand growth.
Gains were limited however as investors remained wary ahead of the results of Italy’s election, amid concerns that a hung parliament could hamper efforts to implement further economic reforms and lead to instability in the euro zone’s third largest economy.
The results of the election were expected to be known on Tuesday, but exit polls were due to be published on Monday afternoon.
Oil traders were also worried about impending sharp automatic U.S. spending cuts, known as sequestration, due to take effect on March 1 unless Congress and the White House find a way to avoid them.
Previous budget battles in Washington have rattled financial markets.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for April delivery rose 0.4% to trade at USD114.55 a barrel, with spread between the Brent and crude contracts standing at USD21.13 a barrel.
