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Commodity Corner: Crude Oil Gets Boost from Manufacturing Figures

By Crude Oil Trader on 11/01/2010 – 8:50 pm PDTLeave a Comment

December crude oil settled 1.9% higher Monday on positive manufacturing news from China and the U.S. Front month oil rose $1.52 to end the day at $82.95 after the China Federation of Logistics and Purchasing (CFLP) announced the country’s Purchasing Managers Index (PMI) for October was 54.7 percent. The latest figure is 0.9 percentage point higher than September’s PMI. The indicator gauges China’s manufacturing sector, and a figure above 50 percent signifies economic growth.

In the U.S., the Institute for Supply Management (ISM) reported that its own manufacturing indicator for October also called the “PMI” increased from 54.4 percent in September to 56.9 percent in October. ISM attributed the 2 1/2 percentage point gain to growth in new orders, production, and employment. Despite these improvements, however, ISM reported that supplier deliveries are slowing down and inventories are growing. Also, the 56.9 percent figure for October is still nearly 6 percent lower than the high for the past 12 months: 60.4 percent in April.

December crude oil traded within a range from $81.32 to $83.86 Monday. Natural gas futures, meanwhile, ended the day lower for the first time since last Wednesday. December natural gas fell 21 cents to settle at $3.83 per thousand cubic feet given abundant inventories and underwhelming demand. Also, warmer temperatures are expected to return to the Central and Eastern U.S. next week and thus further stave off increased demand for heating fuels.

The front month natural gas price fluctuated from $3.825 to $4.19 Monday. The December contract price for a gallon of gasoline rose three cents Monday to settle at $2.09 after trading from $2.06 to $2.13. The expired November contract ended the day Friday at $2.10.

Courtesy of Rigzone.Com


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