Slight improvements in the China, US give some hope to Oil

China is reviving and the news is convincing for most of the population on the earth. One of the reports made public in China has shown that the manufacturing sector may expand at an increased pace due to which the second largest crude consumer will add up positive strength to the economy. The futures traded in the country have also shown an impressive increment of 0.8 percent and this happens to be the fifth weekly rise in the price.

The median estimate of the Purchasing Managers’ Index as per the experts was 50.8 but the actual readings were seen at 50.9; the analysis shows that any number above 50 indicate the expansion in the economy and the obtained value of 50.9 actually supports the expansion of the economy. Similarly, talking about the other positive sign; the industrial production in the United States of America has also shown a small increment of 0.3 percent which is encouraging.

As discussed earlier, the latest PMI which is above the market expectation, though a small magnitude supports the fact that China is in the track of recovery and is gaining a bit of momentum. And this improved headline in the Chinese economy is expected to provide a good support to the oil prices even in 2013. Though the prices are seen going down by almost a 12 percent this year, prices have seen a rise of 0.7 percent by the end of this week.

It’s not long back that the futures made a halt of their movement in the downward direction and then rode back in the upward direction, so now the investors can expect good money with the investment in the oil.  The import of the oil by China has also increased significantly. Only sad news expected to come is that the oil prices may come down next week again looking into the status of no improvement in the fiscal situation of the United States of America.