Oil hits $104 based on China Recovery

Oil climbed towards $104 a barrel on Tuesday as China’s economy showed signs of improvement, though gains were checked by further evidence of damage to Europe’s economy.

China’s manufacturing output in July grew at its fastest pace in nine months, helping lift an index of activity in the country’s factory sector to its highest level since February and suggesting pro-growth government policies are having an impact.

“The preliminary purchasing managers’ indices from the eurozone, on the other hand, remain persistently at recession level and are thus likely to counter any stronger price recovery.”

Brent crude gained 47 cents to trade at $103.73 a barrel by 8:50 a.m. EDT (1350 GMT), after reaching $104.26 in earlier trade.

U.S. crude rose 46 cents to trade at $88.61.

Brent fell more than 3 percent on Monday after Spain’s central bank said the euro zone’s fourth-largest economy sank deeper into recession in the second quarter, stoking fears the country was headed for a bailout.

via Reuters

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza