Brent Recovers On Strong Chinese PMI
Brent crude oil climbed to $108.04 at 5:17 GMT on Thursday morning after the spread between Brent and WTI widened to more than $13 on Wednesday. US crude prices have been on the decline since data showed that the nation's inventories had risen more than expected.
CNBC reported that the US Energy Information Administration released data which showed that crude stockpiles had grown by 24 million barrels in the past month all while refining capacity was reduced by nearly 1.3 million barrels per day due to maintenance.
The EIA data also showed stocks in Cushing Oklahoma grew for the past two weeks, ending 14 weeks of continuous decline. The report surprised investors and put pressure on crude prices.
Adding to pressure on crude prices was news from China which suggested that the number two oil consuming nation's appetite for oil was diminishing. On Wednesday, Chinese news agencies were reporting that Chinese stockpiles had increased in September.
However, on Thursday China's flash manufacturing PMI showed that the nation's manufacturing sector had its largest expansion in seven months. New orders in October soared and took the figure to 50.9, above the 50 point which separates contraction from expansion.
Brent prices also found support from news that Scotland's Grangemouth petrochemical plant and refinery were headed for a shutdown. A round of meetings between the plant's owner and the country's Unite union are set for Thursday, but the company has said there are no prospects for keeping the plant open. The plant's owner Jim Ratcliffe has said that the closure of the petrochemical plant will likely mean the closure of the refinery as well. The refinery in question supplies most of Scotland, Northern England and Northern Ireland's fuel and provides steam to a plant that processes Forties.
© 2016 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.