Commodity Corner: Oil Up 3%
Crude oil rebounded Wednesday on positive manufacturing data from China, encouraging U.S. employment data, and word that the United States may join a European bailout program.
Oil for January delivery rose $2.64 to settle at $86.75 a barrel. One factor providing momentum for oil was a monthly update of the China Purchasing Managers Index (PMI). According to the China Federation of Logistics and Purchasing, the PMI increased by 0.9 percent in November. Also benefiting oil was an ADP Employer Services report indicating that private-sector employers in the U.S. added 93,000 jobs last month. The finding was above expectations.
In addition, the prospect of U.S. backing for faltering banks in European Union countries proved bullish for oil. Citing an unnamed U.S. official, Reuters reported Wednesday that the U.S. might augment a $980 billion dollar fund to bail out heavily indebted EU-region banks using money from the International Monetary Fund (IMF). Other news reports, however, quoted a Treasury Department official who denied that talks were underway to contribute funds to the so-called European Financial Stability Facility.
January crude traded from $83.63 to $86.62.
Bullish sentiment also was evident in the natural gas futures price. January natural gas increased nine cents to settle at $4.27 per thousand cubic feet. Projections of below-normal temperatures through next week in the Northeast and Midwest provided an impetus for Wednesday's increase.
The natural gas futures price fluctuated from $4.16 to $4.32.
Gasoline for January delivery also ended the day higher, gaining 13 cents to settle at $2.30 a gallon. It peaked at $2.31 and bottomed out at $2.18. The December gasoline contract, which expired Tuesday, finished at $2.27.