Crude oil rose for the second day, trading above $ 83 a barrel after climbing a two-week high on growth in Chinese industry and the expectations of the Federal Reserve will take steps to stimulate the U.S. economy.
Oil rose 1.9 percent yesterday as China Federation of Logistics and Purchasing, said the Purchasing Managers’ Index rose to 54.7 from 53.8 in October. Fed policy makers meeting today and tomorrow will probably announce a program for at least $ 500 billion in long-term effects to buy in a monetary stimulus strategy known as quantitative easing.
“The combination of strong Chinese data and forecasts for the quantitative easing this week is to give traders good reasons too long,” said Phil Flynn, vice president of research at PFGBest in Chicago.
Oil for December delivery rose 27 cents, or 0.3 percent, to $ 83.22 a barrel on the New York Mercantile Exchange at 10:36 am in Sydney. Oil advances from 1.52 to $ 82.95 yesterday, the highest settlement since October 1918.
Brent crude oil for December settlement of $ 1.47, or 1.8 percent, yesterday to end the session at $ 84.62 a barrel on the ICE Futures Europe, London-based exchange.
The Chinese Purchasing Managers’ Index exceeded a forecast of 53.8, the median estimate of 13 economists surveyed by Bloomberg News. The country reached the U.S. last year as the largest energy user.
U. S. Factory Index
The Institute for Supply Management’s factory index rose to 56.9 in October from 54.4 a month earlier, the Tempe, Arizona-based group said yesterday. Readings above 50 signal growth. Economists predict the ISM Manufacturing meter would drop to 54, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from 52 to 56.8.
The U.S. ISM new orders rose to 58.9 from 51.1, while the production index jumped to 62.7 from 56.5.
Saudi Arabia has the capacity to continue supplying crude for another 80 years, even if no new discoveries, Oil Minister Ali al-Naimi said in Singapore. The country’s new reserves equal to the amount of extracting each year to add, he said in a speech at the Singapore Energy Summit yesterday.
Consuming countries are pleased with the oil between $ 70 and $ 90 per barrel, al-Naimi said. In April, he said prices in the $ 70 – $ 80 range to be “as close to perfect as possible” and that he hoped that oil would remain in that range.
Hedge funds and other large speculators increased bets on rising oil prices by 9.3 percent in the seven days ended Oct. 26, according to the weekly requirements of the Commodity Futures Trading Commission of Traders report.
French Stocks
France will have to enter gas and refinery production have been introduced last month after the strike left the country with less fuel stocks, Credit Agricole CIB said.
French inventories of gasoline, heating oil and diesel fuel that contains, fell below 53 million barrels at the end of last month, Chris Barrett, a London-based oil analyst, wrote in an e-mail report yesterday. That is 8.6 million barrels below the average of five years from 2003 to 2008.
Labor Unrest in France last 10 months caused refineries to stop operations, so some stations without fuel and pushing up wholesale prices.
source:bloomberg
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