Crude Oil Rebounds From Near Two-Year Low

By Christian Berthelsen 

Oil prices were little changed Tuesday after a final reading on Chinese manufacturing remained flat, indicating sluggish economic expansion in the world's second-largest crude consumer.

Light, sweet crude for November delivery was down 7 cents, or 0.1%, at $94.50 a barrel on the New York Mercantile Exchange. The international Brent crude contract was up 1 cent at $97.21 a barrel on the ICE Futures Europe Exchange.

The final reading of HSBC's China Manufacturing purchasing managers index was unchanged at 50.2 for September. The reading was barely above 50, indicating weak growth; a number below 50 would indicate contraction. The oil market closely watches economic activity in China for indications of global demand. Recent weak data there has contributed to the three-month slide in crude prices.

"Further contributing to the downtrend that has been in play for most of the third quarter has been the lackluster demand profile from the main oil demand growth engine of the world, China," Energy Management Institute analyst Dominick Chirichella said in a note. "The global economic data is currently projecting more of the same - slow economic growth going forward which will result in relatively flat demand at least for the medium term."

The market is also waiting on weekly data from the U.S. Energy Information Administration reflecting the latest supply inventories of crude and refined products. The U.S. uses more oil than any other country. The report is scheduled for release Wednesday morning.

Contracts for refined products are set to expire Tuesday, which analysts said could contribute to volatility in the market. October gasoline futures were up 0.33 cent, or 0.1%, at $2.6996 a gallon on the Nymex. October diesel was down 0.28 cent, or 0.1%, at $2.7013 a gallon.

Write to Christian Berthelsen at [e-mail]

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