Brent crude experienced a rise of $97 per barrel on Tuesday. This was after a factory in China unexpectedly soared in terms of demand outlook in the global market in September.
The expectations proposed by the analysts for a reading of 50 about Brunt crude oil were beat from 50.2 in August to 50.5 in September as orders continued to rise, reported the HSBC China Purchasing Managers’ Index (PMI).
For November, Brent was up 15 cents by 0646 GMT reaching a value $97.12 per barrel, after dropping nearly more than a dollar, on early Monday. Moreover, the U.S. rebounded from as low as $90.58 that was its weakest since September, 11 to reaching $91.18 a barrel – almost up by 31 cents.
Senior Manager for commodities at Phillip Futures, Avtar Sandu said China PMI boosted the recovery in prices. Earlier there was not much room for fuel prices to rise; however, with PMI the market has shown some positive signs.
Lou Jiwei, Finance Minister would not alter any policy because of any one economic indicator. The PMI survey showed an index slump to 5-1/2 year low factory employment.
Although the Brent crude prices were pushed down by more than five percent, but maintaining oil price gains is a crucial concern in a well-supplied market.
Nevertheless, Ali al-Naimi, the Saudi Oil Minister is trying to modulate the concerns of the declining crude oil prices globally, and the speculation it has caused over the Organization of the Petroleum Exporting Countries (OPEC) regarding whether it could reduce the oil output. It could be its first official production cut since 2008 financial crisis.
OPEC members will be reviewing the oil output policy on November, 27 at a meeting that would discuss the need for oil prices to be above $100 a barrel in order to meet the budgetary requirements.
Cuts will only start next year, added ANZ investment bank commodity strategist, Ankit Pahuja.