Crude strengthens as dollar softens, but China concerns remain

25 February 2013 12:13  [Source: ICIS news]

SINGAPORE (ICIS)--Crude values rose more than $1.00/bbl on Monday buoyed by a weaker US dollar, which cancelled out earlier downward pressure generated by concerns over declines in Chinese manufacturing activity.

At 11:55 GMT, April Brent crude on London’s ICE futures exchange was trading at $115.50/bbl, up by $1.40/bbl from the previous close. Earlier, the North Sea benchmark rose to a session high of $115.87/bbl, up by $1.77/bbl.

April NYMEX light sweet crude futures (WTI) were trading at $94.19/bbl, up by $1.06/bbl from the previous close. Earlier, the US benchmark climbed to a session high of $94.46/bbl, up by $1.33/bbl.

The US dollar softened against the Euro and other leading currencies on Monday which made dollar denominated commodities such as oil that are priced in the US currency more attractive to international investors.

The HSBC flash February purchasing managers’ index (PMI) for China declined to a four-month low at 50.4, after hitting a 24-month high of 52.3 in the previous month. A PMI figure above 50 indicates expansion, while a lower number indicates a contraction in manufacturing activity. The fall in PMI figure for China raised concerns regarding the nation’s oil demand growth in 2013.

By: James Dennis
+65 6780 4327

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