-- Crude sheds early losses as dollar drops vs euro
-- Weak China manufacturing data sapped crude price strength earlier
-- Gasoline strength continues into November contract after raucous October expiry Friday
NEW YORK--Crude oil futures prices were higher Monday to start the fourth quarter, as gasoline prices continued to rally on tight inventories.
Overnight, crude oil prices were weaker, after official data showed Chinese manufacturing activity declining in September for a second straight month. China is the world's second-biggest economy and the engine of growth for world oil demand.
Traders' prices shook off the China news as weakness in the dollar versus the euro spurred some buying interest and as prices of reformulated gasoline blendstock futures turned stronger after the October contract surged 42.44 cents in the four days leading to the contract expiration at a 5-1/2 month high Friday amid concerns over low inventories.
Data from the Energy Information Administration show U.S. gasoline stocks nationwide are at four-year lows, while in the heavily populated Northeast, including the New York Harbor delivery point for the Nymex contract, inventories are the lowest on records beginning in November 1990.
Light, sweet crude oil for November delivery on the New York Mercantile Exchange was up 62 cents, at $92.81 a barrel. It has traded in a range of $91.26 to $93.03 a barrel.
November Brent crude on the InterContinental Exchange was 28 cents higher, at $112.67 a barrel.
"As was the case last week, this complex would appear to have something for everybody as far as oil price direction is concerned," Jim Ritterbusch, president of Ritterbusch & Associates, said in a note to clients. "We continue to view the global macro influence as tilted toward the bearish side with overnight Chinese PMI data providing reinforcement in this regard.
"But, within RBOB futures, we see continued price strength despite the demise of the October futures contract. While we still view the euro currency as primary driver of oil price direction looking across this new month of October, we still see the gasoline market as the "tail wagging the dog" over the shorter term one-two week period until supply tightness in the northeast is alleviated," he said.
November RBOB gasoline was 2.59 cents higher, at $2.946 a gallon. November heating oil, was up 0.43 cent at $3.1635 a gallon.
Write to David Bird at david.bird@dowjones.com.
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