Current Oil Prices Rise with Growth in Chinese Manufacturing Activity

The current oil prices are higher, strengthened by a poll showing a rise in the manufacturing activity of China.

In midday trading on the NYMEX, Bangkok time, the U.S. benchmark for delivery in March was up 29 cents to a crude price per barrel of $95.52. The contract shed $1.45 to settle at $95.23 during the previous trading day after reports that the quantity of oil transported through a main Gulf Coast pipeline had been reduced by 50 percent.

The monthly purchasing managers’ index of HSBC, which measures production activity, increased for the fifth straight month, from 51.5 in December to 51.9 in January. Readings higher than 50 on a scale of 100 signifies expansion. Increased manufacturing activity implies higher consumption of energy, which is expected to push the price of oil higher.

The data is additional proof that the economy of China is having a slight recovery from a decline ignited by the global financial crisis in 2008. The economy of China grew 7.9 percent in the last quarter of 2012, up from the 7.4 percent of quarter three, according to recently released data.

On London’s ICE Futures Exchange, Brent, the benchmark used to assign prices to international types of crude, was 1 cent lower to a current crude oil price of $112.79 a barrel.

In other NYMEX trading, natural gas gained 2.2 cents to a price of $3.576 per thousand cubic feet. Heating oil increased 0.4 cent to a price of $3.069 per gallon. And wholesale gasoline rose 0.6 cents to a price of $2.855 a gallon.

By: Chris Termeer