Brent gains on stronger Chinese manufacturing data

Front-month ICE Brent has increased by $0.99/bbl on the day, to $84.05/bbl at 09.00 GMT.

PHOTO: Getty Images

Upward pressure:

Brent gains have been supported by stronger Chinese manufacturing activity data for February. China’s official manufacturing purchasing manager index (PMI) surged to 52.6 in February, up from 50.1 in January and beating analyst predictions of 50.5, Reuters reports. Brent has been trading rangebound in recent weeks awaiting signals of a Chinese oil demand recovery. A further rise in manufacturing activity in the country could help propel crude prices higher.

State-owned Chinese refineries, meanwhile, are expected to cut refinery utilisation this month amid seasonal maintenances, market intelligence provider JLC says. The refineries are expected to cut production by 241,000 b/d this month, JLC data shows.

Downward pressure:

According to an American Petroleum Institute (API) estimate, US crude inventories grew by 6.2 million bbls in the week ending 24 February – suggesting a possible stock build for 10 straight weeks. API’s stock build projection outran a Reuters analyst poll estimate of 700,000 b/d build.

Official Energy Information Administration (EIA) figures are due to come out at 15.30 GMT today.

Iran’s foreign minister Hossein Amir-Abdollahian has claimed that the US has shown interest to resume nuclear deal negotiations, Argus Media has reported. Amir-Abdollahian recently visited Iraq to discuss regional and international issues. He said he got a message from the US via Iraq's foreign minister Faud Hussein during his visit.

By Nithin Chandran

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