Oil rebounds amid weaker dollar, strong U.S. manufacturing data

07:30, February 02, 2010      

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Oil prices rebounded on Monday amid a weaker dollar and a strong report about U.S. manufacturing sector.

Light, sweet crude for March delivery rose 1.54 dollars to settle at 74.43 dollars a barrel on the New York Mercantile Exchange.

In London, Brent crude for March delivery rose 1.83 dollars to 73.29 dollars a barrel on the ICE Futures Exchange.

The Institute of Supply Management (ISM) reported Monday that ISM manufacturing industries composite index jumped by 3.5 points in January to 58.4. There were broad-based gains across all the components of the survey.

The production index catapulted upwards by 6.5 points to 66.2. The employment index distanced itself from the contraction/ expansion threshold of 50, rising by 3.1 points to 53.3. Indexes for new orders and new export orders also moved up.

The strong gains in the ISM manufacturing index are consistent with other leading indicators, analysts said.

The report suggests that growth in U.S. manufacturing sector is accelerating. It prompted optimism bout U.S. economic outlook and oil demand.

Higher risk appetite drove the dollar lower, also helping oil prices. A strong greenback usually limits the appeal of commodities including crude futures as an alternative investment.

Source: Xinhua
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