BLBG: Crude Oil Rises for a Second Day as Chinese Manufacturing Grows
By Grant Smith
Dec. 1 (Bloomberg) -- Crude oil rose for a second day after a report showed Chinese manufacturing expanded at the fastest pace in five years, spurring hopes that the world’s second- biggest oil user will buoy consumption of the fuel.
Oil advanced in tandem with equities, and as a weaker dollar enhanced the appeal of commodities for hedging inflation. The purchasing managers’ index for China, released today by HSBC Holdings Plc, rose to a seasonally adjusted 55.7 from 55.4. The government’s PMI, also released today, held at an 18-month high, aiding the rebound of the world’s third-largest economy.
“Chinese oil demand should increase by 5 percent this year, 4 percent next year,” said Hannes Loacker, an analyst at Raiffeisen Zentralbank Oesterreich in Vienna. “While the rate of growth is slowing down a bit, it means there is still growth there in one of the most important regions.”
Oil for January delivery gained as much as 55 cents, or 0.7 percent, to $77.83 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $77.75 a barrel at 8:35 a.m. London time.
Oil traded near $78 a barrel on Nov. 25 before Dubai World, one of the emirate’s three largest state-linked holding companies, sought to delay payments on its debt and other liabilities. The company has since begun what it described as “constructive” talks with banks to restructure $26 billion, less than half of its $59 billion in obligations.
Brent crude oil for January settlement on the London-based ICE Futures Europe exchange traded at $78.98 a barrel, up 51 cents, at 8:36 a.m. in London. Yesterday, the contract rose 1.7 percent to $78.47 barrel, the highest since Nov. 18.
To contact the reporter on this story: Grant Smith in London at gsmith52@bloomberg.net
