Oil rises in Asia on China stimulus hopes
Crude in New York rose to $98.05
Oil prices surged in Asia on Thursday as hopes of a Chinese stimulus soared after manufacturing activity in the world's largest energy consumer fell to a nine-month low in August, analysts said.
New York's main contract, light sweet crude for delivery in October rose 79 cents to $98.05 a barrel in the afternoon and Brent North Sea crude for October delivery gained $1.04 to $115.95.
Crude markets, which had earlier been buoyed by hopes of additional stimulus from the US Federal Reserve, were given a further boost from heightened optimism that China's central bank would do the same.
"Energy markets have been pretty sluggish, given the renewed hopes of QE3 from the Fed. They needed an excuse to rise and they found it today in weak China flash PMI data," said IG Markets Singapore market strategist Justin Harper.
"The weak manufacturing data today has excited oil traders that... stimulus may be on its way soon, to revive flagging activity in the world's factory," he told AFP.
Preliminary figures released Thursday from the closely watched HSBC purchasing managers' index (PMI), which gauges nationwide manufacturing activity, hit 47.8 this month, its lowest since November.
This raised trader hopes that the Chinese government would intervene with policy easing measures to jumpstart growth.
In the US, hopes for a fresh round of quantitative easing from the Fed were boosted Wednesday when minutes of its last policy meeting were published, IG Markets said in a report.
The minutes said: "Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial strengthening in the pace of the recovery."