THE price of oil rose above US$93 a barrel yesterday at the start of a big week for economic data, culminating in Friday's US nonfarm payrolls report for May.
US benchmark oil for July delivery rose US$1.48 to close at US$93.45 a barrel in New York.
Lately, subpar economic indicators have actually prompted some buying of oil, because the weaker the economy the less likely the Federal Reserve is to begin lifting the stimulus measures it has in place. Yesterday was no different after a weaker-than-expected report on US manufacturing, said Jim Ritterbusch, president of energy consultancy Ritterbusch and Associates.
"Markets such as the equities and oil are interpreting data releases below expectations as a signal that the Fed will delay any tightening measures," Ritterbusch wrote in a note to clients.
A measure of US manufacturing fell in May to its lowest level since June 2009. The Institute for Supply Management said yesterday that its index of manufacturing activity fell to 49 last month from 50.7 in April. A reading under 50 indicates contraction.
But most automakers posted strong sales for May, which could give a boost to sluggish gasoline demand.
Conflicting Chinese figures left investors uncertain over the state of the world's second largest economy. Though the official manufacturing purchasing managers index, a gauge of activity, rose to 50.8 in May from 50.6 the previous month, an equivalent survey from HSBC fell to 49.2 from 50.4. Anything above 50 indicates expansion.
However, a survey for the 17 European Union countries that use the euro offered some hope for the future of the eurozone economy. The monthly manufacturing PMI from financial information company Markit rose to 48.3 points in May from the initial estimate of 47.8.
Brent crude, a benchmark for many international oil varieties, gained US$1.67 to finish at US$102.06 a barrel on the ICE Futures exchange in London.
In other energy futures trading on the New York Mercantile Exchange:
- Wholesale gasoline added 3 cents to end at US$2.79 a gallon.
- Heating oil rose 5 cents to finish at US$2.83 per gallon.
- Natural gas advanced by about a cent to end at US$3.99 per 1,000 cubic feet.
