Oil prices increased today following a preliminary survey report, which showed strong new orders driving the fastest expansion in China’s manufacturing sector in seven months in October, which demonstrated that the economy is stabilising.
Positive data from China helped in offsetting the drop in prices, which were under pressure overnight due to the rise in crude stockpiles in the US, the biggest oil consumer.
Brent crude increased by 37 cents to $108.16 a barrel, while US crude grew by 78 cents at $97.64, reported Reuters.
The survey showed signals that the economy is stabilising, although a strong rebound remains elusive.
The October Markit / HSBC Purchasing Managers Index (PMI) stood at 50.9, above September’s final reading of 50.2 and marking a seven-month high.
But oil prices are speculated to drop in the near feature, as US crude oil inventories rose by 5.2 million barrels last week and at the Cushing hub, stocks rose continuously for the second week, which gave rise to fears of an oversupply in the US.
US Energy Information Administration (EIA) data showed crude oil stockpiles increased by 22 million barrels in the past four weeks, the biggest four-week build since April 2012.
Vyanne Lai, an economist at National Australia Bank, said recent discussions between Iran and the US have drawn out worries over the US budget and increasing oil production in the US and Canada, creating weaker oil fundamentals.
JBC Energy analysts said: "With refinery maintenance winding down and crude runs expected to pick up again, we expect the trend to reverse next month."
Image: Brent value increased after positive economic news from China. Photo courtesy of freedigitalphotos.net.