As the globe's second-largest consumer of the energy commodity, the Asian nation saw stronger results from April to May, when the HSBC Holdings Plc and Markit Economics index rose from 48.1 to 49.7. That comes as good news for the nation that has been a topic of concern given its economic struggles this year and last year.
The energy commodity also benefited from reduced supplies in the globe's top consumer. According to the Energy Information Administration, supplies in the U.S. fell by 391.3 million barrels for week ended. The EIA is the accounting arm of the U.S. Department of Energy.
"China's manufacturing is now only barely contracting," states a Thursday email authored by head of commodity markets strategy Harry Tchilinguirian with BNP Paribas in London, according to Bloomberg. "We remain cautious as to whether this is enough to give a significant boost to industrial commodities like oil."
At 8:37 a.m. on Thursday, West Texas Intermediate crude oil futures edged down 0.18 percent, a 19-cent loss to $103.88 per barrel. Brent crude oil futures inched up 0.05 percent, a 6-cent lift to $110.61 per barrel.
Regarding the globe's top consumer of the energy commodity, economic data indicated the tide is rising for the good.
Fed minutes note tapering likely to resume
Reuters reports the minutes of the late-April policy meeting of the U.S. Federal Reserve indicated that additional tapering of stimulus measures is likely to ensue, as was expected.
For the past four policy meetings, the Federal Open Market Committee has opted to slash monthly asset purchases by $10 billion at each meeting. What was an economy-spurring measure that totaled $85 billion per month now is down to $45 billion per month. The body has said it is aiming to close the program later this year.
The reductions signify the world's largest economy is growing stronger and more dynamic, as the stimulus program was designed. With economic growth comes more opportunity for construction, manufacturing and additional industry, which consume oil.
"The baseline scenario is still for slow, but steady improvement; there is no inflation risk and the Fed will keep tapering," senior currency strategist Richard Franulovich with Westpac in New York told Reuters on Wednesday.
After the minutes from the April 29 and 30 meeting were released in the afternoon of Wednesday, the U.S. dollar advanced in value. The forecast for continued strengthening of the U.S. economy prompted the U.S. dollar to advance against the Japanese yen for the first time in six trading sessions.
When the economy strengthens, the FOMC tends to encourage tapering the amount of asset purchases, which reduces the amount of dollars in the market. Consequently, the value of the dollar grows.
The price of the energy commodity also is impacted by its inventories, which are gauged each week.
Supply slippage prompts upward drive
Crude oil futures pushed to their top value in one month during the Wednesday trade session after the statistical arm of the U.S. Energy Department detailed supplies shrank, according to Dow Jones Newswires.
Amid traders' expectations for an increase, supplies of the energy commodity slipped. For week ended May 16, supplies dropped by 7.2 million barrels. That marks the largest losses in more than 16 weeks.
Those losses controverted expectations for gains by 700,000 barrels.
But, nonetheless, the amount of oil supplies in the nation still is hovering near all-time highs.
"We feel that such a surprisingly large drop could easily be reversed during the next couple of weeks," states a Wednesday note authored by research consultancy Ritterbusch and Associates, according to Dow Jones Newswires. "We are not attaching major significance to today's decline."
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