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Oil extends best run in decade as China data eases slowdown worries
OIL extended gains above US$60 a barrel on Monday on signs that the world's second-largest economy is stabilising, and as investors hope for a breakthrough in US-China trade talks that will resume this week.
Crude futures rose as much as 0.9 per cent in New York, after capping their strongest quarter since 2009. China's manufacturing PMI, the first official economic gauge for March, eased worries over the global economic outlook and boosted sentiment across financial markets. Chinese Vice-Premier Liu He is set to travel to Washington to meet US negotiators from Wednesday, as well as have a sit-down with President Donald Trump.
Oil rallied 32 per cent in the first quarter as Saudi Arabia led the Organization of the Petroleum Exporting Countries and its allies in squeezing supplies to prevent a glut. The trade war between the world's two biggest economies and signs of slowing global economic growth has limited further gains.
"There is bullish sentiment around on economic growth after some pretty good China data over the weekend and oil is probably following the equity markets," said Jeffrey Halley, a Singapore-based senior market analyst at Oanda Asia Pacific Ltd. If there is a breakthrough in the trade talks, "we should see another leg up again", he said.
West Texas Intermediate for May delivery gained 43 cents to US$60.57 a barrel on the New York Mercantile Exchange at 2.38pm in Singapore. The contract rose 1.4 per cent to US$60.14 on Friday. It climbed the most since June 2009 last quarter.
Brent for June settlement was 0.9 per cent higher at US$68.19 on the London-based ICE Futures Europe exchange. The May contract expired on Friday. The global benchmark crude was at a premium of US$7.47 to WTI for the same month.
China's manufacturing purchasing managers index recorded its biggest increase since 2012 last month, exceeding all estimates by economists. Asian equity investors celebrated the data on Monday morning, pushing a key benchmark to its highest level since October.
Meanwhile, Russia's energy ministry offered evidence that the country's production cuts were accelerating as it aims to reach its pledged target by the end of this month. Energy Minister Alexander Novak and his Iranian counterpart, Bijan Namdar Zanganeh, are set to discuss a possible extension of the Opec+ agreement that expires in June. BLOOMBERG