• Home
• /
• Energy

Crude rebounds in Asian trade

Crude turned higher in Asia on Thursday as traders cheered US data showing better-than-expected private sector hiring and a pick up in the service industry, analysts said.

New York’s main contract, light sweet crude for delivery in November gained 17 cents to $88.31 a barrel and Brent North Sea crude added 37 cents to $108.54.

Data from the United States released late Wednesday added to an upbeat outlook for the world’s largest economy and oil consumer, IG Markets said in a report.

“This week traders have seen more positive numbers out of the world’s largest economy that suggest it could be turning a corner at last,” the report said.

It cited an improvement in the forward-looking Purchasing Managers’ Index for the US services sector in September, which followed a rise in the country’s manufacturing activity.

The US private sector also added 162,000 jobs in September, according to a closely-watched survey.

However, analysts said prices were being weighed down by worries over Spain and a slowing Chinese economy.

“This past week, European attention has been focused on Spain’s problems,” said Sanjeev Gupta, who heads the Asia-Pacific oil and gas practice at Ernst and Young.

Traders were watching Spain for hints on whether it would ask for a eurozone bailout soon, after Catalonia president Artur Mas said Wednesday the move was unavoidable and Madrid should ask for it without a long delay.

His came after Spanish Prime Minister Mariano Rajoy refused to say whether the eurozone’s fourth largest economy needs rescuing, insisting instead on the need to study the matter.

Gupta added that in Asia markets were worried about signs of an economic slowdown in China, the world’s biggest energy consumer.

Official figures showed that activity in its non-manufacturing sectors hit a near two-year low last month.

On Wednesday, the Asian Development Bank slashed its growth estimates for Asia’s emerging economies to the lowest level since 2009, citing a slowdown in China and India.

The bank also warned of significant risks caused by the effects of the European debt crisis and continued weakness in the United States, both of which are major export markets.