oil

Brent crude increased today after Chinese non-manufacturing purchasing managers’ indexes (PMI) data showed some resilience; however, prices may struggle to gain further as the US and Iran signalled their readiness to improve ties.

Brent crude gained five cents to reach $109.02 a barrel, while US oil fell two cents to hit $106.92 a barrel, reported Reuters.

Investors are encouraged by the growth in China’s services sector, which recovered from a multiyear low, showing some resilience, as it is expected to set the trend for other key data due to be released this week.

Oil prices also got some support from supply concerns from exporting countries, such as Libya, Iraq and Yemen.

Exports from Libyan oil terminals were flowing at reduced rates due to strikes and protests, while Iraqi shipments are expected to come down between 400,000 and 500,000 barrels per day in September.

"Investors are encouraged by the growth in China’s services sector, which recovered from a multiyear low."

Yemen’s main oil export pipeline in Marib province was hit by an explosion, interrupting crude flow.

Oil prices, however, were capped by the tepid US employment data and receding worries about supply as Iran and the US both signalled a fresh will to end the dispute regarding Tehran’s controversial nuclear programme.

Iran slashed its oil exports by more than half due to the sanctions, which targeted Tehran’s nuclear programme.

Supply concerns amid tensions kept oil prices above $100 a barrel for most of 2012 and in 2013.


Image: Oil gained on optimistic Chinese non-manufacturing PMI data. Photo courtesy of freedigitalphotos.

Energy