by Staff Writers
London (AFP) Oct 24, 2012
Oil prices rebounded slightly on Wednesday, with sentiment boosted by upbeat data from top global energy consumer China, ahead of new economic figures from the United States.
Brent North Sea crude for delivery in December rose 49 cents to $108.74 a barrel in early afternoon deals in London.
New York's main contract, light sweet crude for December, increased 19 cents to $86.86 a barrel.
Crude futures had slumped on Tuesday as weak US company earnings stoked fears about sluggish global economic growth, driving the New York contract to a three-month low.
They rebounded Wednesday as China's manufacturing sector showed signs of recovery after an HSBC survey provided fresh evidence that the worst may be over for the world's number two economy.
The preliminary purchasing mangers' index (PMI) released by the British banking giant hit 49.1 this month, the highest level in three months and up from 47.9 in September. A reading above 50 indicates growth and anything below points to shrinkage.
While the figure marks the 12th straight month of contraction, it is also the second consecutive monthly improvement and adds to recent indications the economy is on the mend after a slowdown stretching back to last year.
"Crude oil prices rebounded from yesterdays sharp losses and corrected higher on Wednesday, as the market looked slightly exhausted from the recent downside momentum," said Sucden Financial Research analyst Jack Pollard.
"The optimistic news from China boosted market sentiment following the strong Chinese PMI figures."
Dealers were meanwhile looking ahead to Wednesday's release of housing start data in the United States.
"The US will finally get a bit of data to look at today -- perhaps it will offer markets a diversion from the lousy earnings reports," DBS Group Research said in a report.
"If any data can do it, it's the housing data and new sales are on tap today," it added.
Oil prices have plummeted since last week after major companies such as Google, IBM and McDonald's turned in weak earnings.
The world's biggest maker of construction and mining equipment Caterpillar on Monday also cut its sales outlook for 2012, indicating a sharp slowdown in the fourth quarter and sparking oil demand fears.
Powering The World in the 21st Century at Energy-Daily.com
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