|Analysis||Crude oil inclined slightly at the beginning of the week, surrendering some of Friday's drop, on upbeat manufacturing data from China, the world's second largest crude consumer, which outpaced the downbeat data from the U.S. released on Friday.|
Oil prices rose to $77.12 a barrel recording a high of $77.65 and a low of $76.55 after PMI manufacturing in China spiked to 18 month high to 55.4. The manufacturing sector data inclined for the seventh consecutive month in October, providing evidence that the third largest economy in the world is leading global recovery.
However, on the other hand, the U.S. data released on Friday underscored fears as spending retreated and unemployment is still high along with the woes surrounding the financial sector. Still, investors are not confident with regard the strength of the recovery despite the robust third-quarter GDP figures. There are talks that the U.S. economy may show negative data in the fourth quarter after withdrawing the stimulus packages.
Moreover, U.S. stocks slipped on Friday on concerns with regard recovery after the plummeting spending data. Wall Street reported its sharpest weekly decline, while in Asia equities fell too as commodities slumped with Nikkei Index closing at the lowest level in 3 weeks.
Commodities plunged last week as the U.S. dollar strengthened against majors. The green currency rebounded after reaching its lowest in 14 months in October, eroding the appeal of commodities as alternative investment.
Oil contract on Friday shed $2.87 closing at $$77.00, while recording a high of $80.21 per barrel and a low of $76.85 per barrel, falling 3.6%. This week more manufacturing data will be due from the U.S. and Europe which will mirror the strength of the recovery.