Monday, November 1, 2010

Crude Oil Advances to a Two Week High on Chinese Expansion, U.S. Stimulus

Crude oil increased to a two week high after Chinese manufacturing expanded at the quickest pace in six months and on expectations the Federal Reserve will announce measures this week to stimulate the U.S. economy. Oil rose 1.9 percent as China’s Federation of Logistics and Purchasing said the country’s purchasing managers’ index climbed to 54.7 in October. The Fed may make more asset purchases, known as quantitative easing, after its meeting Nov. 2 to Nov. 3. An industry report showed that U.S. factory output expanded more than forecast last month.

“The combination of the strong Chinese data and expectations for quantitative easing this week, is giving traders good reasons to be long,” said Phil Flynn, vice president of research at PFGBest in Chicago. Crude oil for December delivery rose $1.52 to $82.95 a barrel on the New York Mercantile Exchange, the highest settlement since Oct. 18. Prices are up 7.7 percent from a year ago. Brent crude oil for December settlement increased $1.92, or 2.3 percent, to $85.07 a barrel on the London based ICE Futures Europe exchange.

The Standard & Poor’s 500 Index advanced 0.2 percent to 1,185.70 at 2:31 p.m. in New York, and the Dow Jones Industrial Average increased 0.2 percent to 11,142.82. The reading in the logistics federation’s PMI in China compared with 53.8 for both the previous month and the median forecast of 13 economists surveyed by Bloomberg News. The country overtook the U.S. last year as the biggest energy user......Read the entire article.


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