Brent Makes Modest Gains On China PMI

Brent crude oil edged above $97 on Tuesday morning, helped by better than expected economic data out of China. The commodity traded at $97.06 at 8:00 GMT with a global supply glut continuing to weigh on prices.

HSBC/Markit Flash PMI data from China pleasantly surprised, with the nation’s index climbing to 50.5 in September from last month’s 50.2 reading. The figure beat expectations of a 50 reading and made its way further above the 50 point mark that indicates expansion. As one of the world’s largest oil consuming nations, the improvement in China helped buoy hopes that global demand is on the mend.

Brent has been under pressure recently as data from both China and Europe continuously disappointed and crude supplies from across the world increased. Geopolitical tension around the globe has had a limited effect on prices as most see supply from affected nations continuing without any interruptions.

Investors are keeping a close eye on OPEC nations as they prepare for a November meeting. The group usually works to keep prices above $100 as most member nations use that figure as a starting point to balance their budgets. CNBC reported that Saudi Oil Minister Ali Al-Naimi appeared calm about falling crude prices on Monday, saying that the market has a natural ebb and flow. Despite that, many expect that the group will discuss cutting supplies at the November meeting, which if carried out, would be the first cut in production since the global financial crisis began back in 2008.