BLBG:WTI Crude Rises a Second Day as China Manufacturing Strengthens
West Texas Intermediate oil advanced for a second day, extending the biggest monthly gain since last August as manufacturing unexpectedly strengthened in China, the world’s second-largest crude consumer.
Futures climbed as much as 0.7 percent in New York after rising yesterday by the most in three weeks. China’s Purchasing Managers’ Index increased to 50.3 last month, exceeding the 49.8 median forecast in a Bloomberg survey and a reading of 50.1 in June. Government data showed U.S. gross domestic product expanded more than forecast, and crude stockpiles at Cushing, Oklahoma, the main American depot, fell to a 15-month low.
“China’s PMI is better than expected and that built on the news of the better GDP figure from the U.S.,” said Ric Spooner, a chief market analyst at CMC Markets in Sydney. “We would need to see WTI move past its recent highs to conclude that the current movement wasn’t an upward correction against a bigger downward movement.”
WTI for September delivery climbed as much as 69 cents to $105.72 a barrel in electronic trading on the New York Mercantile Exchange and was at $105.49 at 2:56 p.m. Singapore time. The volume of all futures traded was 14 percent less than the 100-day average. The contract rose 1.9 percent to $105.03 yesterday, gaining the most since July 10. Prices advanced 8.8 percent in July for a second monthly increase.
Brent for September settlement was up as much as 45 cents, or 0.4 percent, to $108.15 a barrel on the London-based ICE Futures Europe exchange. The European benchmark was at a premium of $2.32 to WTI futures. The spread narrowed for the first time in six days to $2.67 yesterday.
Chinese Factories
China’s manufacturing index, reported today by the National Bureau of Statistics and the China Federation of Logistics and Purchasing, suggested a slowdown in the world’s second-biggest economy may be stabilizing as the government rolls out measures to support growth. The July reading above 50 indicated manufacturing is expanding.
The Asian nation accounted for about 11 percent of global oil consumption last year, compared with 21 percent for the U.S., according to BP Plc’s Statistical Review of World Energy.
U.S. gross domestic product rose at a 1.7 percent annualized rate in the second quarter, the Commerce Department said yesterday. That’s more than a 1 percent gain predicted by economists surveyed by Bloomberg.
Oil Supplies
Stockpiles at Cushing, the delivery point for New York-traded crude, dropped by 1.9 million barrels to 42.1 million in the week ended July 26, according to data from the Energy Information Administration yesterday. That’s the lowest level since April 2012.
Total U.S. crude inventories increased by 431,000 barrels last week, said the EIA, the Energy Department’s statistical arm. Supplies were estimated to decline by a median 2.45 million, according a Bloomberg survey of 12 analysts.
Gasoline stockpiles climbed by 770,000 barrels last week, the EIA said. They were projected to decrease by 1.5 million, the survey shows. Distillate inventories, a category that includes heating oil and diesel, slid by 466,000 barrels, compared with a 450,000-barrel gain forecast in the survey.
The Organization of Petroleum Exporting Countries pumped less crude for a second month in July amid the biggest drop in Libyan output since the 2011 war that overthrew Muammar Qaddafi. Production fell 245,000 barrels, or 0.8 percent, to an average 30.662 million barrels a day from a revised 30.907 million in June, a Bloomberg survey of oil companies, producers and analysts shows. OPEC’s 12 members supply about 40 percent of the world’s crude.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski at akwiatkowsk2@bloomberg.net
