The price of oil rebounded to near $93 a barrel on Monday amid signs of an economic improvement in Europe at the start of what could be a pivotal week in financial markets.
Earlier, prices fell to their lowest level in a month on the back of mixed Chinese manufacturing data. The coming week is jam-packed with economic data, culminating in Friday's U.S. nonfarm payrolls report for May.
By early afternoon in Europe, benchmark oil for July delivery was up 84 cents at $92.81 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, the Nymex contact fell $1.64 to close at $91.97. Having fallen to $91.26 earlier, traders were seen buying back in the market to take advantage of the lowest prices since May 2.
Oil prices are being pressured by weak economic outlook around the world. Faltering economies demand less gasoline, diesel and fuel from drivers, shippers and industries. Hopes over the strength of the U.S. economy have helped support prices, despite mixed signals from China and Europe -- the two other big pillars of the global economy.
Analysts at Sucden Financial Research in London said U.S. figures later could support prices further "provided expectations for stronger domestic auto sales and construction spending are realized."
On Monday, conflicting Chinese figures left investors uncertain over the state of the world's second largest economy. Though the official manufacturing purchasing managers index, a gauge of activity, rose to 50.8 in May from 50.6 the previous month, an equivalent survey from HSBC fell to 49.2 from 50.4. Anything above 50 indicates expansion.
However, a survey for the 17 European Union countries that use the euro offered some hope for the future of the eurozone economy. The monthly manufacturing PMI from financial information company Markit rose to 48.3 points in May from the initial estimate of 47.8.
In recent trading sessions, oil prices have been weighed down by U.S. government figures indicating ample supplies as well as last week's decision by the Organization of Petroleum Exporting Countries, or OPEC, to keep its voluntary production level at 30 million barrels a day despite rising supplies.
Brent crude, a benchmark for pricing oil used by many U.S. refineries to make gasoline, was up $1.35 to $101.74 in on the ICE Futures exchange in London.
In other energy futures trading on the New York Mercantile Exchange:
- Wholesale gasoline added 4.91 cents to $2.804 a gallon.
- Heating oil rose 3.47 cents to $2.8161 per gallon.
- Natural gas advanced 0.6 cent to $3.99 per 1,000 cubic feet.
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