DTN Oil Update
Oil Futures Rise on China's Manufacturing Data
HOUSTON (DTN) -- â?¯Oil futures climbed Monday morning, recovering from losses recorded last week and tracking China's economic data, which showed an improvement in the manufacturing sector.
The NYMEX WTI and ICE Brent futures contract for May delivery rose by $0.35 to $70.11 barrel (bbl) while the front-month ICE Brent edged up by $0.37 at $73.18 bbl. The RBOB futures contract for April delivery fell by $0.0091 to $2.2314 gallon while April ULSD futures contract edged down by $0.0083 to $2.3067 gallon.
The U.S. Dollar Index dropped by 0.83% to 107.56 against a basket of foreign currencies.
The Purchasing Manager's Index for China's manufacturing sector came in at 50.2 in February, up 1.1 percentage points from the previous month official data showed. A reading above 50 indicates expansion, while a reading below 50 reflects contraction, China's news agency Xinhua reported Saturday, March 1.
Market expectation for China's PMI was 49.9%.
"New export orders saw an uptick during the month to 48.6 from 46.4. While this represented â?¯a â?¯tenth consecutive month in contraction, there doesn't appear to be any significant immediate impact from the first round of U.S. tariffs in February," said Lynn Song, chief economist for ING Research, in a note.
China's economy is closely monitored by market participants as weak demand from this country -- the world's main buyer of crude -- has put downward pressure on the main crude benchmarks since last year.
In February, the United States imposed a 10% tariff on imported goods from China. But effective March 4, the Trump administration is expected to increase an additional 10% on imports from China, 25% on imports from Mexico and 10% on Canadian energy imports.
The trade tariff war has set a bearish sentiment in the oil futures markets since Trump took office on Jan. 20, keeping the NYMEX WTI futures contract below the $70 mark.
