Wednesday, September 1, 2010
Crude Oil Climbs After Reports Show Gains in U.S., Chinese Manufacturing
“Oil moves along with equities, the fundamentals don’t matter,” said Chip Hodge, who oversees a $9 billion natural, resource bond portfolio as senior managing director at MFC Global Investment Management in Boston. “Any shred of positive or negative economic news will move the oil market by a couple percentage points.” Crude oil for October delivery rose $2.26, or 3.1 percent, to $74.18 a barrel at 10:59 a.m. on the New York Mercantile Exchange. Oil traded at $73.63 a barrel before the release of the report at 10:30 a.m. in Washington.
Economists forecast the ISM factory index would decline to 52.8, according to the median of 78 projections in a Bloomberg News survey. Estimates ranged from 49.9 to 56. Manufacturing in China grew at a faster pace in August after the weakest performance since early 2009 in July, signaling that the economy’s slowdown is stabilizing.
The purchasing managers’ index rose to 51.7 from 51.2, exceeding forecasts, a government-backed report showed. Seasonal factors might have had an effect because the index typically gains as factories restart following July maintenance, Mizuho Securities Asia Ltd. said. A separate PMI released by HSBC Holdings Plc and Markit Economics gained to 51.9 from 49.4.
The August reading for the government index was more than the median 51.5 forecast in the Bloomberg survey of 17 economists. Fifty is the dividing line between expansion and contraction.
Australia’s economy grew at the fastest pace in three years last quarter, stoked by China’s demand for iron ore. Gross domestic product advanced 1.2 percent from the first quarter, when it rose a revised 0.7 percent, the Bureau of Statistics said in Sydney today.
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