The rebound came after oil futures ended August down more
than $7, as inventories swelled and the demand outlook dimmed
with gloomy U.S. economic data. The decline of almost 9 percent
was the biggest monthly percentage decline since May.
London ICE Brent crude futures <LCOc1> rose $1.77 to end at
$76.35.
China's purchasing managers' index (PMI) rose to 51.7 in
August from 51.2 in July, official data showed, the 18th
straight month it has been above the level of 50, which
separates expansion from contraction.
The U.S. manufacturing sector also grew faster than
expected in August, chalking up a 13th straight month of
expansion, helping to calm fears that economic growth was
stagnating in the world's largest fuel user.
The data boosted investor confidence and Wall Street stocks
rose 2 percent, on track for the strongest daily gain in eight
weeks. A broad array of commodities also rose.
The EIA reported that U.S. crude stockpiles rose 3.4
million barrels in the week to Aug. 27, as refineries pared
utilization rates. The gain was larger than forecast, but much
lower than the 4.8 million barrel rise reported on Tuesday by
the industry group American Petroleum Institute.
Distillate supplies fell 739,000 barrels, going against
forecasts for an increase, and gasoline inventories declined
212,000 barrels, slightly more than expected, EIA data showed.
The large build in U.S. total crude stockpiles could deepen
the contango in crude markets, when front month futures trade
at a discount to later months, another sign of weak demand in
the giant U.S. market. (http://link.reuters.com/qet58n )
The spread between the first- and second-month crude oil
contracts ended at $1.50, narrowing from $1.60 on Tuesday,
which was the widest level since early June.
The U.S. dollar fell against major currencies after the
upbeat manufacturing data calmed investors worried about the
global economy, improving appetite for riskier assets. [USD/]
In late trading, the greenback was down 0.82 percent
against a basket of currencies. <.DXY>
The euro <EUR=> gained as European shares rose at their
fastest pace in three months after fears eased over a renewed
global slowdown, another supportive factor for oil prices.
Crude oil supply from the Organization of Petroleum
Exporting Countries fell in August to the lowest level since
Novemer 2009 as output from Nigeria, the United Arab Emirates
and Iraq declined, according to a Reuters monthly survey.
U.S. government storm trackers said a newly formed tropical
depression in the eastern Atlantic Ocean would strengthen into
Tropical Storm Gaston during the next 48 hours. But it was too
early to tell if the system would make its way to the oil-rich
Gulf of Mexico.
Powerful Hurricane Earl and Tropical Storm Fiona were both
expected to march northerly in the Atlantic, off the U.S. East
Coast, computer models showed. (See:
http://link.reuters.com/san78n )
(Additional reporting by Robert Gibbons, David Shelppard and
Eileen Moustakis in New York; Christopher Johnson and Joe Brock
in London; Editing by David Gregorio)