Crude Slightly Higher On China PMI; Stronger Dollar Weigh

Crude oil slightly recovered some losses on Friday after falling near a four-month low the previous session as China’s manufacturing activity expanded at its fastest pace in 18 months, countering concerns about rising crude supplies in the US.

In China, the world`s second-biggest oil consumer, the official manufacturing index rose to 51.4 in October beating estimates for a 51.2 reading and the previous figure of 51.1, which provides further evidence the economy is enjoying a sustained recovery.

China’s data eased the worries about the falling demand in the US, the world’s biggest oil consumer, after inventories climbed by 4.1 million barrels to 383.9 million last week, the highest level since June, the Energy Information Administration showed Wednesday.

- WTI crude oil futures for December is trading around $96.52 a barrel after rising $0.14

- Brent futures for December settlement is trading around $109.26 a barrel after rising $0.42

“Rising stockpiles in the U.S. could keep downward pressure on prices in the short term, but these inventories will decline in the weeks ahead as refineries return to production from autumn maintenance”, said Gordan Kwan from Nomura Holdings.

Yet as the dollar index is trading around the highest in two weeks, amid believes the US manufacturing index will probably weaken in October while the euro fell to the lowest in two weeks on signs of economic weakness in the eurozone, gains for crude are limited.

As for Brent, it is set to post its biggest weekly gain in about two months, on concerns over supply as Libya struggles to ramp up exports and unrest in Iraq worsens. Yet the contract was under pressure overnight as investors sold the spread between Brent and crude after the price difference between the two widened to the most in six months.

- Natural gas is trading at $3.563 per cubic feet after falling 0.50%

- Gasoline is trading at $2.598 per cubic feet after rising 0.43%

- Heating oil (diesel) is trading at $2.9658 a gallon after rising 0.40%