Oil prices have increased after China’s factories suddenly increased production in September 2019, thereby easing demand worries amid a trade dispute with the US.
Brent crude futures rose $0.09 to $62 a barrel, while US West Texas Intermediate (WTI) crude futures rose $0.13 to $56.04 a barrel, reported Reuters.
After factories in China unexpectedly increased production and secured new orders, the Caixin/Markit Manufacturing Purchasing Managers’ Index (PMI) expanded in September 2019 for a second straight month.
Oanda Singapore senior analyst Jeffrey Halley was quoted by Reuters as saying: “The Caixin data was a real surprise and should be positive for Asia’s markets today.”
Jeffrey added that similar data trend should be continued over the next few months to point to a China oil demand growth recovery.
In October 2019, Brent is set to increase to 2.6%, with prices lifted by an unprecedented attack on Saudi’s oil facilities that halved its production.
Following the attacks, Saudi Arabia has restored capacity to 11.3 million barrels per day (boe/d), sources told Reuters last week. Saudi Aramco is yet to confirm that it is completely back online.
Phillip Futures Singapore senior commodities manager Avtar Sandu said: “Most of this is already priced in when the Saudis said they were going to do it (resume production) fast.”
Saudi Arabia is using crude from stock and spare production capacity to maintain exports. Avtar further added that the quantity of crude which is actually being restored can only be determined in the next few weeks.
Saudi Arabia’s prince Mohammed bin Salman warned in an interview broadcast that oil prices could increase to high numbers if the world does not come together to deter Iran. The prince added that he would prefer a political solution to a military one.