Investing.com - Crude oil futures surged in early Asian trade Monday, rebounding from an earlier drop following the release of data showing weakness in U.S. manufacturing production.
On the New York Mercantile Exchange light, sweet crude futures for October delivery traded at USD87.69 a barrel during early Asian trade, advancing 2.3%, after hitting a daily low of USD84.70.
New York’s Federal Reserve Bank reported Monday that its index of manufacturing conditions worsened in August, falling 3.9 points to minus 7.7, following a minus 3.8 figure in July.
The Empire State manufacturing index, which measures economic health in the manufacturing sector by surveying about 200 manufacturers in New York State, was forecast to improve slightly from July to minus 0.4.
But encouraging news from Japan helped to reverse losses in oil, as the world’s third largest economy reported its gross domestic product fell by 0.3% in the April to June quarter, from minus 0.9 the previous quarter. Although Japan’s GDP remained in negative territory, the quarterly figure was well below market expectations of a 0.6% fall.
The Japanese economy contracted by 3.6% in the January to March quarter, the period during which the country was hit by a devastating earthquake and tsunamis. Japan is the world’s third largest energy consumer after the United States and China.
Meanwhile, Royal Dutch Shell estimated that more than 54,000 gallons of oil had spilled into the North Sea from one of the company’s oil rigs near Scotland’s eastern coast. Shell co-owns the facility with Esso, a subsidiary of U.S. oil company Exxon Mobil.
While Shell said it was unclear at what point last week the leak had begun, the company said it was under control. The British government said the mishap was limited in scope compared to the BP spill in the Gulf of Mexico last year, which resulted in over 200 million gallons of oil being dumped into the ocean.
On the ICE Futures Exchange Brent oil futures for October delivery added 1.84% to trade at USD109.59.
Global financial service provider Barclays earlier maintained its forecast that Brent oil will average USD110 a barrel in the third quarter of 2011.