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Crude oil edges higher on China PMI, U.S. supply data eyed

Published 01/24/2013, 04:23 AM
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Investing.com - Crude oil futures edged higher during European morning hours on Thursday, as sentiment improved following the release of data showing manufacturing activity in China expanded at the fastest rate in two years last month.

Traders also looked ahead to closely-watched weekly supply data on U.S. stockpiles of crude and refined products from the U.S. Energy Information Administration later in the day.

On the New York Mercantile Exchange, light sweet crude futures for delivery in March traded at USD95.59 a barrel during European morning trade, up 0.4% on the day.

New York-traded oil prices rose by as much as 0.6% earlier in the session to hit a daily high of USD95.66 a barrel.

Data released earlier showed that China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, rose to a 24-month high of 51.9 in December from a final reading of 51.5 in November.

The upbeat data added to the view that China’s economy is gaining momentum. The Asian nation is the world's second largest oil consumer after the U.S. and has been the engine of strengthening demand.

Oil traders were now anticipating weekly data from the U.S. government on oil and fuel supplies later in the day to gauge the strength of demand from the world’s largest oil consumer.

The report was expected to show that U.S. crude oil stockpiles increased by 1.8 million barrels last week, while gasoline inventories were forecast to rise by 1.5 million barrels.

The supply data comes out a day later than usual due to the Martin Luther King Jr. Day holiday in the U.S. on Monday.

After markets closed Wednesday, the American Petroleum Institute, an industry group, said that U.S. crude inventories rose by 3.17 million barrels last week, while gasoline stocks decreased 1.57 million barrels.

Investors continued to monitor political developments in Washington, amid concerns over how the country will tackle the upcoming USD16.4 trillion debt ceiling debate.

The U.S. House of Representatives passed a bill Wednesday to allow the government to borrow enough money to avoid a first-time default for at least four months.

The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.

Elsewhere, on the ICE Futures Exchange, Brent oil futures for March delivery dipped 0.1% to trade at USD112.73 a barrel, with the spread between the Brent and crude contracts standing at USD17.14 a barrel.

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