Oil futures held steady in electronic trade Monday after bouncing out of negative territory as data showed that China’s economy was healing faster than expected.
Midday in East Asia, November crude oil was almost flat, down 2 cents to $104.73 a barrel compared to its Friday close. The contract had traded below $104.50 earlier in the day.
Manufacturing activity in China, which close to surpassing the U.S. as the world’s leading oil consumer, showed a notable jump to a six-month high in September, according to preliminary data from September from HSBC.
The “flash” version of HSBC’s China manufacturing Purchasing Managers’ Index rose to 51.2, compared to August’s final result of 50.1. Economists on average had expected a 50.9 reading.
Last week, oil prices finished below $105 a barrel for a weekly loss of more than 3%. The market was left to mull demand prospects after the Federal Reserve said the world’s largest economy isn’t yet strong enough to grapple with life without monetary stimulus.
Citi Futures energy analyst Timothy Evans said he sees oil prices dropping to “more conservative valuations” in the intermediate term.
“There may still be some risk that the deal on Syrian chemical weapons breaks down or that the current Iranian offer to renew nuclear talks goes sour and worries about supply mount again, but we see supplies becoming more secure in the months ahead,” he said.
In other energy trading Monday, November natural gas lost 2 cents, or 0.5%, to $3.74 per million British thermal units. Prices were up about 0.3% last week.
Among the petroleum products, November gasoline fell less than 1 cent, or 0.1%, to hold at $2.66 a gallon.
Source : Marketwatch