Oil extended gains for a second session on Wednesday as a result of a strong leap in manufacturing in China, which leads to a boost in the outlook for global fuel demand.
The Chinese manufacturing activity increased in February at the fastest pace in more than a decade, according to an official index on Wednesday. This has added to the global hopes that the country’s recover can balance a global slowdown as well as increase the oil demand.
Brent crude rose 45 cents, or 0.5 percent to $83.90 per barrel at 09:10 GMT, while U.S. West Texas Intermediate (WTI) crude gained 49 cents, or 0.6 percent to $77.54, according to Reuters.
Stephen Brennock of oil broker PVM said that the Chinese economy recovery can only have a positive effect on oil prices.
The Chinese official manufacturing purchasing managers’ index (PMI) inclined to 52.6 in February against 50.1 in January.
“Another round of upside surprise in China’s PMI further provides conviction of a stronger-than-expected recovery, which supports a more optimistic oil demand outlook,” Market strategist at IG, Yeap Jun Rong, said .
Rong added that there were signs of rising supply in crude stocks in the United States, world’s top consumer, and these signs lead to the Chinese offset.
American Petroleum Institute (API) figures showed on Tuesday, the U.S. oil inventories rose by 6.2 million barrel from the 20th of February to the 24th.
According to a Reuters survey, another indication of a rise is shown from the crude production and supply by the OPEC which rose by 150,000 barrels per day in February.
