Oil headed for its first gain this week, boosted by a rebound in manufacturing in China and Europe. US benchmark oil for October delivery was up 46 cents to USD 104.31 a barrel in Thursday afternoon trading on the New York Mercantile Exchange.
Oil fell USD 3.61 a barrel, or 3.6 per cent, over the first three days of the week mostly due to expectations that the Federal Reserve will start phasing out its monetary stimulus, possibly starting September 2013. Those concerns kept a lid on oil's gain today. The eurozone's purchasing managers' index, a key gauge of growth in both the manufacturing and services sectors, rose to 51.7 points in August from 50.4 in July, according to financial information company Markit.
It was the highest reading since June 2011 and supported expectations that the eurozone's recovery from recession is gaining momentum. As for China, HSBC Corporation said the preliminary version of its monthly PMI for Chinese manufacturing rose to 50.1 for August, a sharp improvement from July's figure of 47.7.
Oil rises as China, Europe factories ramp up
The figures helped divert investors' attention away from the question of when the Fed will begin to reduce its monetary stimulus. Elsewhere, North Sea Brent, the benchmark for international crudes, was down 22 cents to USD 109.59 a barrel on the ICE Futures exchange in London.