Oil prices gain on positive data

| November 3, 2009 | 0 Comments

Following positive economic data from the US and China yesterday, US light crude rose $1.13 a barrel to end Monday trading at $78.13, while London Brent added $1.35 to $76.55.

While prices are still way off the peak of $147 set in July 2008, they have been steadily rising due to strong economic data and increased optimism about the global economic recovery.

Yesterday, the US housing market received a boost after the National Association of Realtors (NAR) said its Pending Home Sales Index rose to 110.1 in September - its eight consecutive monthly rise.

The index now stands at the highest level since December 2006 when it was 112.8. The index is 21.2% higher than September last year when it was at the 90.9 mark and the annual gain is the largest on record.

Furthermore, the Institute for Supply Management (ISM) revealed a rise in US manufacturing for the month of October.

The ISM said its factory index jumped to 55.7% in October from 52.6% in September - any figure above the 50 mark represents growth in the sector.

In the meantime, it was revealed that HSBC’s China Purchasing Managers’ Index had risen for the seventh consecutive month in October - to an 18-month high of 55.4.

According to Phil Flynn, an analyst at PFGBest Research in Chicago, “A string of economic data led by higher US manufacturing numbers gave the oil markets a shot in the arm.”

“Oil futures are still trading in the recent range here, but the market is sensing that, if manufacturing continues to be strong, that will translate into higher demand for oil,” he added.

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