Forexpros – Crude oil futures pared gains on Monday, pulling back from the daily high following the release of weaker-than-expected euro zone manufacturing data, which overshadowed hopes for a quick breakthrough on resolving the region’s ongoing debt crisis.
On the New York Mercantile Exchange, light, sweet crude futures for delivery in December traded at USD87.72 a barrel during European morning trade, gaining 0.37%.
It earlier rose by as much as 1.59% to trade at a daily high of USD88.64 a barrel.
Crude prices came under pressure after preliminary data released earlier showed that manufacturing activity in the euro zone slumped to a 27-month low in October.
Separate data showed that manufacturing output in Germany also dropped to a 27-month low, adding to fears that the euro zone could be slipping into a recession.
Energy traders pay close attention to manufacturing numbers, as they are used to gauge future oil demand growth.
Crude prices remained supported after European leaders indicated progress on resolving the region’s ongoing debt crisis, following a series of weekend meetings in Brussels by European leaders.
A comprehensive response to the two-year old sovereign-debt crisis was expected to be unveiled at a follow-up meeting of EU policy makers on Wednesday.
Also lending support, a preliminary reading of the HSBC China purchasing managers’ index rose to a five-month high of 51.1 in October, moving into expansion territory for the first time in four months.
China is the world’s second largest consumer after the U.S. and has been the engine of strengthening demand.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for December delivery rose 0.49% to trade at USD110.09 a barrel, with the spread between the Brent and crude contracts standing at USD22.37 a barrel.
Oil traders continued to monitor developments in Libya in order to asses how quickly oil production in the country would return to pre-war levels, following the death of longtime Libyan leader Muammar Gaddafi on Friday.
Libya had been producing about 1.6 million barrels a day nationally until the outbreak of civil war but unrest brought a halt to nearly all oil exports.
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