Crude oil near US$96 a barrel on upbeat China manufacturing, US jobless data

The price of oil rose Thursday on positive economic news from the U.S. and China.

Benchmark West Texas Intermediate crude gained 72 cents to finish at US$95.95 a barrel on the New York Mercantile Exchange.

Brent crude, used to price international varieties of oil, rose 48 cents to end at US$113.28 a barrel on the ICE Futures exchange in London.

Observers pointed to signs that oil demand is picking up in China, where HSBC’s monthly purchasing managers’ index rose for the fifth consecutive month in January to 51.9 from 51.5 in December.

Readings above 50 on the index, which gauges manufacturing activity, indicate expansion. More manufacturing means more energy consumption, which should push oil prices higher.

In the U.S., the number of Americans applying for unemployment benefits fell last week to the lowest level in five years, evidence that employers are cutting fewer jobs and may step up hiring.

Meanwhile, the U.S. Energy Information Administration said oil supplies rose by 2.8 million barrels last week, more than analysts expected. That pushed oil stockpiles to 363.1 million barrels, up 8.5 per cent from year-ago levels.

But gasoline supplies dropped by 1.7 million barrels as demand rose and refineries slowed down, according to the Energy Department’s statistical arm. Analysts had been expecting an increase in gasoline stocks.

On Wednesday, oil dropped by $1.45 a barrel after crude shipments through the Seaway pipeline from Cushing, Okla., to refineries on the Gulf Coast had to be cut to less than half because of limited capacity. Supplies of benchmark crude at the crucial Cushing hub remain at the highest level in 20 years. That’s expected to fall as the pipeline carries more crude.

In other energy futures trading on the Nymex, wholesale gasoline rose three cents to finish at US$2.86 a gallon (3.79 litres), heating oil added less than a penny to finish at US$3.09 a gallon, and natural gas fell 11 cents to end at US$3.45 per 1,000 cubic feet.