Investing.com - Oil prices surged on Monday following strong Chinese economic data and signs of supply tightening.
New York-traded West Texas Intermediate crude futures gained 42 cents, or 0.7%, at $60.56 a barrel by 9:47 AM ET (13:47 GMT).
Meanwhile, Brent crude futures, the benchmark for oil prices outside the U.S., traded up 70 cents, or 1.0%, to $68.28.
After three-straight months of contraction, manufacturing activity in China expanded more than expected in March, easing concern over a slowdown in the world’s second-largest economy. China’s Caixin manufacturing purchasing managers’ index rose from 49.9 to 50.8, above the 50-mark that separates expansion from contraction and its strongest level since last August.
OPEC oil supply sank to a four-year low in March, according to a Reuters’ survey released on Monday. Saudi Arabia led the cartel’s charge to cut production while U.S. sanctions and power outages shrank Venezuelan output.
The positive news gave crude prices a further boost, extending a first-quarter rally that saw the barrel of West Texas Intermediate oil jump more than 30%.
Production cuts from OPEC and its allies in 2019, along with U.S. sanctions on Iran and Venezuela, have supported prices this year, but a slowdown in global growth has limited upside as investors worry over the negative impact on demand for oil.
The Chinese economic data was also accompanied by positive steps in current Sino-U.S. trade negotiations. Beijing said over the weekend that the country would maintain its suspension of additional tariffs on U.S. vehicles and auto parts after April 1, matching a U.S. decision to delay tariff hikes on Chinese imports as both sides attempt to reach a deal.
Following meetings in Beijing, Chinese Vice Premier Liu He will be in Washington this week to continue high-level trade talks.
In other energy trading, gasoline futures dipped 0.1% to $1.8807 a gallon by 9:47 AM ET (13:47 GMT), while heating oil advanced 0.6% to $1.9831 a gallon.
Lastly, natural gas futures traded up 1.6% to $2.704 per million British thermal units.