24 October 2012, Sweetcrude, LONDON – UK Brent crude futures ended a six-day losing streak on Wednesday to climb towards $109 a barrel.
This came on the heels of economic data suggesting a strengthening recovery in China.
China’s manufacturers saw growth shrink for a twelfth successive month in October, but output stood at a three-month high and order books were the most robust since April, preliminary results of a purchasing managers survey showed.
The data helped allay concerns that the global economy may be slowing faster than previously expected, as a recent spate of poor US corporate earnings and outlooks had indicated.
Brent crude had risen 46 cents to $108.71 a barrel early on Wednesday. It fell for a sixth straight session on Tuesday, when it hit an intraday low of $107.31, the weakest since 20 September and below its 100-day moving average at $107.42.
US oil gained 44 cents to $87.11, snapping a four-day decline. The front-month contract slumped more than 3% on Tuesday to touch a session-low of $85.69, the lowest since 13 July.
“The PMI data is supportive for commodities and I expect the crude market to be buoyant,” said senior investment analyst at Phillip Futures, Ker Chung Yang.
“The upside for oil has been dampened by global economic concerns in Europe and China. But the upbeat PMI data from China is relieving concerns of slower growth.”
Oil prices have been under pressure in the past few days because of a weak demand outlook, although fears of possible supply disruption due to unrest in the Middle East have lent some support.
