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Crude holds gains in Asia after China PMIs boost demand views

Published 10/31/2016, 09:59 PM
Updated 10/31/2016, 10:01 PM
© Reuters.  Crude gains after China PMIs

© Reuters. Crude gains after China PMIs

Investing.com - Crude prices held gains in Asia on Tuesday, lifted by China PMI data that beat expectations with industry supply estimates late in the day expected to set the tone going ahead.

The American Petroleum Institute will release estimates of U.S. crude and refined product inventories late on Tuesday. The figures will be followed by official data from the U.S. Department of Energy on Wednesday.

Crude oil for December delivery on the New York Mercantile Exchange rose 0.15% to $49.63 a barrel. Reuters reported that Colonial Pipeline Co shut down both of its main gasoline and distillates pipelines on Monday that flow from refineries on the U.S. Gulf Coast to storage tanks on the U.S. East Coast after an explosion and fire in Shelby County, Alabama, near the site of a gasoline spill last month.

Brent oil for January delivery on the ICE Futures Exchange in London rose 0.62% to $48.87 a barrel.

The Caixin manufacturing PMI soared to 51.2, a full point above the expected 50.2, and followed the semi-official China Federation of Logistics & Purchasing (CFLP) manufacturing PMI for October also at 51.2, data released on Tuesday showed, beating an expected 50.4, as the CFLP non-manufacturing PMI, rose to 54.0 from 53.7 in the previous month. The figures will aid sentiment on signs of demand by the world's second largest oil importer.

Overnight, oil prices added to overnight losses during North American hours on Monday, falling to a fresh one-month low amid mounting skepticism over the implementation of a planned deal by OPEC to limit production.

Non-OPEC producers made no specific commitment on Saturday to join OPEC in limiting oil output levels to prop up prices, suggesting they wanted the oil producing group to solve its differences first.

On Friday, OPEC members failed to agree on how to put in place a global deal to limit production, following objections from Iran which has been reluctant to even freeze its output, sources said.

The 14-member oil group reached an agreement to cap output to a range of 32.5 million to 33.0 million barrels per day in talks held in Algeria in late September.

However, OPEC said it won’t finalize details on individual output quotas until its next official meeting in Vienna on November 30.

In September, the group’s production reached 33.4 million barrels a day.

The possibility that producers could walk away empty-handed from the November meeting looms large after Iraq, Iran, Nigeria and Libya all signaled they might not take part in the proposed production cut deal. Russia’s unclear stance is also fueling uncertainty.

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