Brent rises above $123 on China data, Mideast supply worries
Date: 02/04/2012
Brent crude rose above $123 on Monday after positive manufacturing data from China eased fears of a sharp economic slowdown in the world's second-largest oil consumer and continuing tension in the Middle East threatened crude supplies.
China's official Purchasing Managers' Index (PMI) , which highlights activity at large factories, beat expectations to hit an 11-month high of 53.1 in March, data showed on Sunday.
Investors have been worried about Chinese growth losing steam as policymakers aim for a more sustainable economy that is less vulnerable to rising prices.
Front-month Brent crude gained 30 cents to $123.18 a barrel by 0641 GMT. The benchmark ended the first quarter on Friday up 14.3 percent, its biggest quarterly rise since the first quarter of 2011.
U.S. crude futures rose 21 cents to $103.23, after rising by more than 4 percent in the previous quarter.
"The Chinese PMI numbers were much better than expected and that would have an impact on oil. This will help answer some of the questions over a potential hard landing in China," said Ben Le Brun, a market analyst at OptionsXpress in Sydney.
Asian shares were also higher on Monday, as risk appetite returned on China's manufacturing data. However, the pickup in production at large factories was attributed to an expected increase as winter ends, and economists warned against reading too much into the stronger-than-expected figure.
Further boosting optimism over China's growth prospects, Vice Premier Li Keqiang said on Monday the government's top priority is to boost domestic consumption to maintain relatively strong economic growth.
The market will also be watching for March U.S. manufacturing data, the ISM index, expected later on Friday for fresh signs of a recovery in the world's biggest oil user.
"The market is currently expecting a mild recovery in March after the drop in the previous month," said analysts at Deutsche Bank in a report.
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China's official Purchasing Managers' Index (PMI) , which highlights activity at large factories, beat expectations to hit an 11-month high of 53.1 in March, data showed on Sunday.
Investors have been worried about Chinese growth losing steam as policymakers aim for a more sustainable economy that is less vulnerable to rising prices.
Front-month Brent crude gained 30 cents to $123.18 a barrel by 0641 GMT. The benchmark ended the first quarter on Friday up 14.3 percent, its biggest quarterly rise since the first quarter of 2011.
U.S. crude futures rose 21 cents to $103.23, after rising by more than 4 percent in the previous quarter.
"The Chinese PMI numbers were much better than expected and that would have an impact on oil. This will help answer some of the questions over a potential hard landing in China," said Ben Le Brun, a market analyst at OptionsXpress in Sydney.
Asian shares were also higher on Monday, as risk appetite returned on China's manufacturing data. However, the pickup in production at large factories was attributed to an expected increase as winter ends, and economists warned against reading too much into the stronger-than-expected figure.
Further boosting optimism over China's growth prospects, Vice Premier Li Keqiang said on Monday the government's top priority is to boost domestic consumption to maintain relatively strong economic growth.
The market will also be watching for March U.S. manufacturing data, the ISM index, expected later on Friday for fresh signs of a recovery in the world's biggest oil user.
"The market is currently expecting a mild recovery in March after the drop in the previous month," said analysts at Deutsche Bank in a report.
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