08/23/2011
by Claudia Assis-MarketWatch.com
Crude-oil futures settled higher Tuesday, extending their gains to a second session on a triple-digit rise for U.S. equities and a lower dollar. Crude oil for October delivery, the new front-month contract, added $1.02, or 1.2%, to $85.44 a barrel on the New York Mercantile Exchange.
It ended near its session highs after a weak start of floor trading. So far this month, oil is down 11%.
Brent crude also traded higher, with the blend's October contract up 95 cents, or 0.9%, to $109.31 a barrel on ICE Futures in London.
Earlier, both benchmarks fluctuated between small gains and losses. Oil markets were debating whether “prices belong at current levels. ... The background macroeconomic picture continues to trend bearish,” said Tim Evans, an oil analyst with Citigroup’s Citi Futures Perspective in New York.
The day’s batch of macroeconomic reports was mixed.
China’s August purchasing managers index rose to 49.8 from 49.3 in July, which was viewed by some as a positive development.
It signaled a second month of a contraction in China and adds to concerns about the European and U.S. economies, Evans said.
The German manufacturing PMI for August was unchanged from July at 52 and beat the 50.8 consensus forecast. The euro zone’s PMI for the manufacturing sector fell to 49.7 from 50.4 in July, but this came in above forecasts for a reading of 49.5.
August’s composite PMI index for the euro zone was 51.1 — unchanged from a 22-month low in July, but better than the 50.3 consensus forecast.
Closer to home, the Richmond Fed said Tuesday that its manufacturing index slumped to a negative 10 in August from negative 1 in July, as shipments and new orders declined sharply.
The dollar index, which compares the U.S. unit to a basket of six currencies, traded at 73.837, down from 74.063 in North American trade late Monday.
Meanwhile, fighting for control of Libya’s capital, Tripoli, raged on Tuesday.
The Brent market was under pressure Monday from expectations the four-decade-old regime of Col. Moammar Gadhafi was coming to an end, which would mean at least some of the sweet, light Libyan oil back on line.
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