OIL prices rose slightly yesterday on positive US economic reports on manufacturing and retailing.
Benchmark crude for October delivery rose 12 cents to settle at US$88.93 per barrel on the New York Mercantile Exchange. Prices fluctuated during the day, touching a low of US$88.21 a barrel and a high of US$89.90.
In London, Brent crude lost 56 cents to end at US$114.29 on the ICE Futures exchange.
Hurricane Katia was moving across the Atlantic and forecasters said a new storm could be forming off the Northeast Coast. The US National Hurricane Center in Miami said it's too early to tell if Katia will hit the US.
Meanwhile, forecasters said there was an 80 percent chance a tropical depression could form in the Gulf of Mexico. It was unclear where that system would head, but it could bring much-needed relief to drought-plagued Texas.
The Gulf system already has prompted two major petroleum producers to remove crews from a handful of production platforms. Royal Dutch Shell and Exxon Mobil said they would also cut off a small amount of production. Both moves affect only a fraction of production.
Also yesterday, the dollar rose after reports on jobs and retail sales suggested that the US economy is still growing.
The Institute for Supply Management said that US manufacturing expanded for the 25th straight month. Analysts had expected a contraction. The growth was still down from July.
Manufacturing has been one of the strongest parts of the economy since the recession ended two years ago. In another economic report, retailers posted big revenue increases in August, a key back-to-school shopping month. Consumer spending makes up 70 percent of the US economy.
A string of parallel manufacturing surveys in Europe showed that manufacturing sectors of most major economies there are shrinking. Germany, the region's powerhouse, is just barely growing.
Crude has risen 17 percent from Aug. 9 amid a growing consensus that the US economy will see weak growth, but not contract, in the second half. Oil traders often look to equities as a barometer of overall investor sentiment, and the Dow Jones industrial average has risen four consecutive days. However, it dropped 1 percent yesterday ahead of a key Labor Department report on jobs.
In other Nymex trading, heating oil fell 3.22 cents to finish at US$3.0518 per gallon, gasoline rose 1.64 cents to US$2.8927 per gallon and natural gas fell 0.4 cent to US$4.05 per 1,000 cubic feet.
Source:shanghaidaily