Crude Oil Insights Crude Price Outlook, Uncategorized Crude oil price insight: Oil rises with reports of increased China’s PMI and weak dollar

Crude oil price insight: Oil rises with reports of increased China’s PMI and weak dollar

China Federation of Logistics and Purchasing released the official PMI for China today, which showed an increase in its PMI of 0.9, rising from 53.8 in September to 54.7, indicating strong growth. HSBC China manufacturing PMI was also released today which showed an increase from 52.9 to 54.8.

This increase in China’s PMI left a positive impact on the oil prices, which were seen to be showing a bullish trend today. At 1131 GMT, crude oil for December delivery was trading 71 cents higher at $82.14/barrel. Increase in China’s PMI, coupled with a weak USD is helping oil prices rally up. At 1143 GMT, USD-EUR exchange rate, which at one stage crossed the $1.40/Euro barrier, was $1.3960/Euro. As the trading is set to commence soon in the US, we believe the USD will remain bearish today as less than expected increase in the US quarterly GDP figures have strengthened the belief that the size of QE2 will be significant causing the USD to weaken. Due to the weak USD and positive news in the market about increase in China’s PMI, we expect oil prices to have a bullish trend today.

Gold prices have continued to rally, taking advantage of a weak USD. At 1140 GMT, gold for December delivery was trading at $1,361.40, up $3.80. We expect gold to continue its northward movement as we do not expect a recovery by the USD until the FOMC meeting this week.

 

Author: Irfan