Brent crude oil regained some momentum on Tuesday as new economic data turned investors’ attention back to demand after weeks of worrying about geopolitical tension and its effect on supply.
The commodity traded at $112.68 at 8:40 GMT following the release of better than expected Chinese data.
Reuters reported that China’s official Purchasing Managers’ Index came in at 51 in June, an increase from May’s 50.8 reading and a six month high for the nation. The figure injected some positivity into markets as the world’s number two oil consuming nation looked to be on the road to recovery.
China has been struggling with poor economic data and sluggish growth, but June’s PMI score indicated that both domestic and foreign demand are on the rise.
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Oil markets have been driven by supply interruption worries lately as geopolitical tension in Ukraine, Libya and Iraq threatens to escalate.
However, those worries began to subside this week as most of the risk has been priced in, leaving investors hungry for economic data which can provide an indication about future demand.
Moving forward, investors will be anticipating US jobs growth data, set to be released a day early on Thursday due to the July 4 holiday. Most analysts see the report showing job gains above 200,000 with estimates of an increase between 210,000 and 213,000.
If the figures live up to expectations, it will be the fifth consecutive month that non-farm payrolls rose by more than 200,000; something that will likely bolster confidence in the US’ recovery.
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