Brent crude rose to a one-month high above $115 on Thursday after China’s manufacturing rebounded in August, stoking expectations that growth in the world’s largest energy consumer will offset slowing industrialised economies.
Front-month Brent touched $115.27 a barrel, the highest intraday price since Aug. 3, and was up 15 cents from Wednesday at $115 by 0500 GMT. US crude benchmark West Texas Intermediate (WTI) climbed 27 cents to $89.08.
China’s official purchasing managers’ index (PMI) rose to 50.9 in August from a 28-month low of 50.7 in July, official data showed, while upbeat sentiment across financial markets lifted Asian stocks on hopes the US Federal Reserve would intervene to support the economy.
‘Generally China has surprised on the upside and we expect it to continue to do so, although it will continue to moderate growth,’ said Jeremy Friesen, commodity strategist at Societe Generale in Hong Kong.
‘We acknowledge the difficulties for China’s policymakers to deal with inflation, but we still think that the economy will be stronger than the market is fearing.’
China Premier Wen Jiabao signalled on Thursday that controlling inflation will remain a top priority in coming months even as the world economy wobbles.
Concern about hurricane-related disruptions to supply in the US Gulf of Mexico also supported oil prices.
Katia strengthened into a hurricane over the Atlantic on Wednesday, while another mass of thunderstorms that could become a named storm this week triggered evacuations of some oil workers from the Gulf of Mexico.
BP began to evacuate more than 500 non-essential workers from four platforms in the region, home to large volumes of US crude and natural gas production.
Brent crude is on track for eight straight sessions of gains following a sharp drop of 2.8 million barrels in US gasoline stockpiles last week and as North Sea production issues keep European crude supplies tight.