(Reuters) - Brent crude was steady above $119 a barrel on
Wednesday, supported by positive manufacturing data from the United
that lifted hopes of higher oil demand at the world's top two
U.S. manufacturing growth in April hit its highest level in 10
months, while China's factory sector also expanded last month,
government data showed on Tuesday.
A private-sector survey geared towards smaller Chinese firms
also showed that manufacturing activity improved in April, but
remained below the threshold of 50 that divides expansion from
"The economic data is supporting oil prices, but there will be
anxiety ahead of the U.S. jobs report on Friday, so I don't expect
any big volatility for the rest of the week," said Gordon Kwan,
head of energy research at Mirae Asset Management in Hong Kong.
Prices would be rangebound, with Brent trading between $115-$120
this week, he added.
for June slipped 14 cents to $119.52 a barrel by 2:08 a.m.
EDT, after settling 19 cents higher at $119.66 on Tuesday. U.S.
crude for June was down 30 cents at $105.84.
Asian shares followed Wall Street higher and the dollar recovered
against the yen on Wednesday on the strong U.S. factory data.
Market participants will be watching Friday's key nonfarm
payrolls report for further evidence of a sustained U.S. economic
recovery that is likely to boost oil prices.
Analysts expect hiring by U.S. employers to have rebounded in
April, which could ease worries the economy has stumbled into a
soft patch. Nonfarm payrolls are expected to rise 170,000 in April,
up from a meager 120,000 in March.
Despite the positive data, lingering concerns over the
debt crisis and a slowdown in the Chinese economy continued
to weigh on prices, analysts said.
"China is a concern, with new loans falling sharply last month.
The question is whether the government's easing measures have come
in time for a soft landing," said Kwan.
Chinese bank lending is estimated to have dropped 30 percent in
April from a month earlier as demand for credit declined, the
official China Securities Journal reported on Wednesday.
Debt woes in the euro zone also continued to dampen sentiment, with
Spain, the fourth-largest economy in the grouping, sinking into
recession in the first quarter.
In the United States, crude oil stocks rose by 2 million barrels
last week, the industry group American Petroleum Institute (
) said, less than expected.
Ahead of weekly inventory reports, a rise of 2.5 million barrels
for crude, a sixth consecutive build, was forecast in a Reuters
survey of analysts.
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