Crude Oil Ends Higher On Upbeat Data

(RTTNews) - U.S. crude oil snapped a three-day loss to end higher Tuesday, on the back of some upbeat manufacturing activity data out of the U.S. and China, lifting demand growth outlook prospects for oil. The developments over military action against Syria also contributed to the uptick in oil prices.

President Obama expressed confidence the Congress would approve his military action plan against Syria, prior to a White House meeting. Meanwhile, investors continued to be anxious with supply disruption concerns over an immediate military intervention against Syria by the U.S. and its allies.

China's manufacturing sector performance strengthened in August, suggesting the overall economic growth may gather pace in the coming months in the world's second largest economy, according to two separate surveys. Meanwhile, after reporting the biggest monthly jump in manufacturing activity in seventeen years in the previous month, manufacturing activity in the U.S. expanded at an even faster rate in August, a report from the Institute for Supply Management showed Tuesday.

Light Sweet Crude Oil futures for October delivery, the most actively traded contract, gained $0.89 or 0.8 percent to close at $108.54 a barrel on the New York Mercantile Exchange Tuesday.

Crude prices for October delivery scaled a high of $108.83 a barrel intraday and a low of $104.21.

Last week, oil gained over 1 percent to settle near a 16-month high, heavily influenced by the tense situation in Syria with the U.S. and its allies mulling possibilities of military intervention. Any military move against Syria could spread tensions through the Middle East and disrupt oil supplies from the region.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.37 on Tuesday, up from 82.28 at its previous close in North American trade. The dollar scaled a high of 82.52 intraday and a low of 82.23.

The euro traded lower against the dollar at $1.3169 on Tuesday, as compared to its previous close of $1.3193 in North America. The euro scaled a high of $1.3197 intraday and a low of $1.3140.

In economic news from the U.S., the Institute for Supply Management said its purchasing managers index edged up to 55.7 in August from 55.4 in July, with a reading above 50 indicating an increase in manufacturing activity. The modest increase by the index came as a surprise to economists, who had expected the index to dip to a reading of 53.8. With the unexpected increase, the index added to the 4.5-point.

Separately, the US Commerce Department said construction spending rose 0.6 percent to a seasonally adjusted annual rate of $900.8 billion in July from the revised June estimate of $895.7 billion. Economists had been expecting spending to increase by about 0.3 percent.

China's manufacturing sector performance strengthened in August, with the purchasing managers' index, a gauge of factory activity, increasing to a 16-month high of 51 in August from 50.3 in July, the China Federation of Logistics and Purchasing (CFLP) and the National Bureau of Statistics said Sunday.

A survey by HSBC and Markit Economics the final China PMI reading was 50.1 in August, up from a 11-month low of 47.7 in July. This ended a three-month period of deterioration. The index score matched the flash reading.

Industrial producer prices in the euro area increased for a second consecutive month in July, data published by Eurostat revealed. The producer price index of the industrial sector, excluding construction, rose 0.2 percent year-on-year in July following a 0.3 percent increase in June. Economists had forecast a 0.1 percent rise.

During the week, focus will be on the Labor Department's monthly non-farm payrolls report for August, the ADP's private sector employment report and the weekly jobless claims report.

Also, focus will be on the crude oil inventories data from the American Petroleum Institute due Wednesday, and the Energy Information Administration report on Thursday.