WTI gains as China’s manufacturing growth beats estimates

West Texas Intermediate crude advanced for a second day after China’s manufacturing topped estimates in November, signaling the world’s second-biggest oil consumer is sustaining its economic growth.

Futures rose as much as 0.6 percent in New York. The Purchasing Managers’ Index was 51.4, the National Bureau of Statistics and China Federation of Logistics and Purchasing said yesterday. That exceeded 24 out of 26 projections in a Bloomberg News survey, while a separate gauge released today was also higher than forecasts. OPEC will keep its oil-production quota unchanged at 30 million barrels a day at a meeting this week in Vienna, another survey shows.

“What we’ve seen over the past few months is a clear steadying of the growth outlook in China,” Michael McCarthy, a chief strategist at CMC Markets in Sydney, said by phone. “The idea of a hard landing, which was damping energy demand, has now all but dissipated.”

WTI for January delivery climbed as much as 59 cents to $93.31 a barrel in electronic trading on the New York Mercantile Exchange, and was at $93.27 at 3:45 p.m. Singapore time. The contract gained 42 cents to $92.72 on Nov. 29. The volume of all futures traded was about 17 percent below the 100-day average. Prices fell 3.8 percent in November, a third monthly decline.

Brent for January settlement increased as much as 69 cents, or 0.6 percent, to $110.38 a barrel on the London-based ICE Futures Europe exchange. The European benchmark crude was at a premium of $16.96 to WTI. The spread closed at $16.97 on Nov. 29, narrowing for a second day.

Chinese Factories 

The official Chinese manufacturing index yesterday matched the 18-month high in October. Today’s gauge from HSBC Holdings Plc and Markit Economics was 50.8, exceeding all 13 analyst estimates. A reading above 50 signals expansion.

China will account for about 11 percent of global oil demand this year, compared with 21 percent for the U.S., according to the International Energy Agency, a Paris-based adviser to developed nations.

Brent rose 0.8 percent in November for a second monthly advance as unrest in Libya, the holder of Africa’s largest oil reserves, disrupted supply. Output slid 40,000 barrels a day last month amid feuding militias and protests, a separate Bloomberg survey shows.

OPEC Supply 

Crude production from the Organization of Petroleum Exporting Countries dropped to a two-year low in November, led by losses in Saudi Arabia and Nigeria, according to the survey of oil companies, producers and analysts. Output from the 12-member group decreased by 245,000 barrels a day to an average 30.007 million last month, compared with 30.252 million in October.

WTI may fall this week as U.S. production at the highest level in almost 25 years boosts inventories, according to another Bloomberg survey. Ten of 23 analysts and traders, or 43 percent, forecast futures will decline through Dec. 6. Six respondents projected an increase and seven predicted no change.

U.S. crude output climbed to 8.02 million barrels a day in the seven days ended Nov. 22, the fastest rate since January 1989, data from the Energy Information Administration showed last week.

Bloomberg