Crude oil prices advanced in Asia Thursday after a private survey showed that China’s manufacturing activity expanded for the first time in more than a year in November.
Light sweet crude for January delivery gained 0.23 percent or 20 cents to $87.58 a barrel in electronic trading on the New York Mercantile Exchange during the Asian trading hours. Brent crude oil futures for the January delivery rose 0.01 percent or 1 cents to $110.87 a barrel on the ICE futures exchange in London.
The HSBC Flash Purchasing Managers Index (PMI), a measure of the nation-wide manufacturing, gained to 50.4 in November, entering an expansionary territory of above 50 for the first time in 13 months, from October’s final reading of 49.5, easing worries about a sharp growth slowdown in the world's second-largest oil consuming nation.
However, the upward move was limited as the concerns over supply disruptions eased after Israel and Gaza have agreed to halt hostilities to bring an end to eight days of violence. Crude prices have been gaining all week on fears that growing tensions in the Middle East may threaten supplies.
"As of this morning, the energy sector is outperforming the market due to higher energy prices despite the alleviation of some supply concerns for crude oil due to the ceasefire agreement in the Middle East. It appears that investors are not fully convinced that the temporary break of hostilities is a long-term solution to the conflict in the region,” Miguel Audencial, a sales trader at CMC Markets, said in a note, Reuters reported.
On Wednesday, crude futures pared earlier gains but ended higher after reports of a ceasefire in the Gaza Strip. Light sweet crude for the January delivery gained 0.7 percent or 63 cents and settled at $87.38 a barrel on the New York Mercantile Exchange while Brent crude for the January delivery rose 1 percent or $1.11 and settled at $110.94 a barrel.
Meanwhile, the U.S. Energy Department’s weekly petroleum inventory report Wednesday showed that domestic stocks of crude oil fell by 1.47 million barrels in the week to Nov. 16, contrary to a rise of 900,000 million barrels forecast by a Reuters’ poll with analysts.