Oil rose back above $80 on Friday to a fresh seven-week high
after stronger-than-expected U.S. and Chinese economic data raised
hopes of demand recovery in the world's largest consumers.
China's manufacturing sector gathered momentum last month, the
official purchasing managers index (
) number showed, providing further evidence that the economy is
pulling smoothly out of a second-quarter swoon.
U.S. crude for November rose 63 cents to $80.60 a barrel at 0654
GMT (2:54 a.m. EDT), adding to an 11.2 percent gain in September,
the largest monthly jump since May 2009.
ICE Brent for November was up 66 cents at $82.97 a barrel, the
highest in more than eight weeks.
"The China PMI data shows that the manufacturing sector is
accelerating and will result in stronger oil demand," said Michelle
Kwek, an analyst at Informa Global Markets in Singapore.
"This has boosted sentiment and kept oil prices supported."
China's financial markets are closed for a week from October 1
to 7 for the National Day holiday.
In the United States, data on Thursday showed new jobless claims
fell last week, regional manufacturing grew faster than expected
and consumer spending was stronger than expected.
"All eyes will be on the Institute for Supply Management (
) report on U.S. manufacturing," Peter Beutel, president of U.S.
trading advisory Cameron Hanover, said in a note.
"Any return to stronger numbers - or a better-than-expected set
of figures - would bring in more buying, we would expect."
Economists in a Reuters survey expect a reading of 54.5 versus
56.3 in August.
The positive economic data has kept the U.S. dollar steady on
Friday after dropping to an eight-month low against a basket of
currencies the previous day.
"The dollar could well rally further, downplaying the extent of
QE (quantitative easing) needed and push down U.S. treasury
yields," said Informa's Kwek.
A stronger dollar makes oil less affordable to holders of other
The market is also watching Ecuador, an OPEC member country
which typically exports around 300,000 barrels per day of crude,
after Thursday's military and police protests thrust the country
into political unrest.
Ecuador's state oil company Petroecuador said on Thursday its
operations had not been affected by political unrest and that the
army was reinforcing security at its oil fields.
(Editing by Ed Lane)