Oil prices gain support on strong US and Chinese economic data

Brent’s price gained some support after manufacturing PMI in the US and China showed signs of gradual improvement in December.

PHOTO: Flags of the US and China. Getty Images

China's Manufacturing Purchasing Managers' Index (PMI) reading recorded 50.1% growth in December, dropping marginally from 50.3% in November, the country’s National Bureau of Statistics (NBS) reported.

The data showed some growth in China’s factory activity, leaving room for more measures to boost the country's economic growth. Despite the slight drop, the Chinese manufacturing PMI was still in the expansionary territory.

A PMI reading above 50 typically indicates good economic health and an expansion in the manufacturing sector, which includes production, inventory levels, new orders, etc. This also indicates good demand for commodities like oil.

In the US, manufacturing PMI increased to 49.3% in December, up from 48.4% recorded in November, the Institute for Supply Management (ISM) said.

Although the PMI reading has remained slightly below 50, manufacturing activity in the US recorded growth in December.

By Aparupa Mazumder

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