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Brent Strong On Positive Data From China And US

ByBenzinga
AuthorBenzinga
Published 08/01/2013, 05:37 AM
Updated 05/14/2017, 06:45 AM
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Brent crude oil was on the rise on Thursday morning after positive economic data from both the US and China supported hope that global demand was improving. The commodity traded at $107.68 at 7:12 GMT.

US employment data showed that hiring in July continued at the same rate as in June for private employers. The data supported speculation that the US economy has a bright outlook.

CNBC reported that official PMI data was better than expected despite an earlier reading which showed the nation's factory activity was at its weakest since August 2012. China's PMI increased to 50.3 in July from 50.1 in June. The official figures gave a much better outlook for the nation, as the previous report showed a score below 50, which indicates contraction.

Many analysts are saying the Chinese data will support oil prices in the short term, but the nation's oil demand isn't expected to increase in the longer term. Most see China as struggling with slower growth and an imbalanced economy, which will continue to dampen the number two oil consumer's appetite.

Crude prices also found support from Wednesday's conclusion of the US Federal Reserve meeting, at which policy makers showed no desire to begin tapering the bank's stimulus spending early. The Fed's $85 billion per month bond buying plan has long underpinned commodity prices, and the threat of its removal has put pressure on Brent prices.

However, at the Fed's policy meeting this week, officials made it clear that they are not in a hurry to shrink their stimulus spending.

BY Laura Brodbeck

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