New York Current Crude Oil Prices Increased After Strong US Manufacturing Activity

New York oil prices increased following an unexpected flow in the manufacturing activity of the United States which signaled a strong recovery of the biggest economy in the world.

In New York, light-sweet crude oil prices for June delivery finished at $106.06 per barrel which is an increase of $1.29 compared to its closing rate in the previous day. In London, Brent crude prices for June delivery added 16 cents to end at $119.66 per barrel.

David Morrison, GFT Markets trading group’s senior strategist, said that oil prices moved higher after a better than anticipated reading from the United States manufacturing PMI. Because of this, hopes increased that the economy of the United States is stronger compared to what the latest data showed.

Based on a recent release of a closely observed index, production activity in the US as the largest crude oil consumer grew unexpectedly this month.

The purchasing manager’s index of the Institute for Supply Management moved higher from 53.4% to 54.8% from March to April. That is contrary to the decline forecasted by analysts.

The recovery of the United States from the terrible recession in 2008 to 2009 has been spearheaded by the manufacturing industry of the country. The positive PMI report stirred up optimism before the release of April’s official job report.

Manufacturing activity is considered a leading indicator for the commodities market, as more or less raw materials inputs will be required by the industry to meet demand.

The manufacturing sector of China also supported the market. The second largest economy and the top consumer of energy in the worldwide said that manufacturing activity in April increased for the fifth consecutive month to its highest in 13 months.

The official PMI index increased from 53.1 in March to 53.3 in April which slightly missed expectations.

iiTrader.com’s trader Rich Ilczyszyn noted that the New York market had a favorable response to the PMI data of the United States. However, prices stayed stuck between the range of $100 and $110.

By: Chris Termeer