Oil price steady on Chinese manufacturing survey
The price of oil hovered under $87 a barrel Wednesday as hopes that the slowdown in Chinese manufacturing might be stabilizing helped shore up sentiment across financial markets.
By early afternoon in Europe, benchmark oil for December delivery was down 12 cents to $86.55 a barrel in electronic trading on the New York Mercantile Exchange. That's a distinct improvement on the $1.98 fall on Tuesday, which left the price of oil at a three-month low of $86.67.
In London, Brent crude was up 22 cents to $108.47 a barrel on the ICE Futures exchange.
Tuesday's fall was sparked by a slew of disappointing earnings and forecasts released Tuesday by U.S. corporate giants. Revenue fell compared with a year ago at chemical maker DuPont, UPS, Xerox and others.
But sentiment improved after HSBC Inc. released a preliminary version of its monthly China purchasing managers’ index, which rose to a three-month high of 49.1. That still was below the 50-point level that indicates a contraction in manufacturing but was a strong improvement from September's 47.9.
China's government has cut interest rates twice since June and is pumping money into the economy through higher investment by state companies and more spending on building subways and other public works.
Analysts at Danske Bank in Copenhagen said the improving index “suggests that the Chinese economy is bottoming out and is poised to recover moderately in the coming months as long as global demand does not weaken further.”
A stronger dollar, however, weighed on oil prices by making crude more expensive for traders using other currencies. Hurt by Europe's deteriorating growth prospects and the bloc's debt crisis, the euro was down at $1.2942 on Wednesday from $1.2985 late Tuesday in New York.
In other energy futures trading in New York:
— Wholesale gasoline rose 1.36 cents to $2.6047 per gallon.
— Natural gas fell 3.9 cents to $3.496 per 1,000 cubic feet.
— Heating oil rose 0.54 cent to $3.0362 per gallon.
Pamela Sampson in Bangkok contributed to this report.