BS: Crude Fluctuates on Chinese Economic Data, Strengthening Euro
Oil fluctuated as a report showed China’s non-manufacturing industries expanded at the slowest pace in more than a year in May and the euro strengthened against the dollar as Spain’s borrowing costs decreased.
Prices traded near the lowest level in eight months as China’s purchasing managers’ index fell to 55.2 in May from 56.1 in April, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday in Beijing. The euro rebounded from near a two-year low against the dollar.
“Commodity traders are definitely looking to China to get some answers and if China is weak, there is your oil demand,” said Rich Ilczyszyn, chief market strategist and founder of Iitrader.com in Chicago. “The euro is strengthening and it’s supportive for oil.”
Oil for July delivery rose 9 cents to $83.32 a barrel at 9:33 a.m. on the New York Mercantile Exchange after falling to $81.21, the lowest intraday level since Oct. 6.
Brent futures for July settlement declined 54 cents, or 0.5 percent, to $97.89 a barrel on the ICE Futures Europe exchange in London. The European benchmark closed June 1 at the lowest level since January 2011 after falling below $100 for the first time since October.
China’s purchasing managers’ index for non-manufacturing industries reached the lowest reading since March 2011 when the federation started seasonally adjusting the data. The report followed data June 1 that showed manufacturing in the world’s second-largest oil consuming country grew less than forecast in the same month.
The U.S. Labor Department said June 1 that American employers added the fewest workers in a year in May. The euro region’s jobless rate reached a record high, the European Union’s statistics office in Luxembourg reported on the same day.
The euro gained 0.4 percent against the dollar after touching $1.2288 on June 1, the weakest level since July 1, 2010. A stronger euro and weaker dollar increase oil’s appeal as an alternative investment.
To contact the reporter on this story: Moming Zhou in New York at mzhou29@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
