Brent Steady On Chinese PMI Data

Published 03/21/2013, 08:01 AM
Brent crude oil traded steadily at $108.55 at 6:55 GMT on Thursday morning after positive data from China offset recent concerns about the state of Cyprus' financial sector.

Chinese manufacturing data contributed to speculation about a better global demand outlook and propped up Brent prices. According to CNBC, the HSBC Purchasing Managers' Index for March was 51.7, up from 50.4 in February.

The modest gain indicates the nation had solid growth in the first quarter and could be a sign that the Chinese economy is on track for a steady recovery.

The US Federal Reserve's decision to continue with its stimulus plan also added support to Brent prices on Wednesday, as investors took comfort in the oil consuming giant's ongoing growth efforts. US jobless claims data is due on Thursday afternoon, and positive figures could help push Brent prices even higher.

In the eurozone, Cyprus' decision to reject a banking levy that would tax large accounts in order to raise funds to unlock its EU bailout money has reignited worries about a eurozone break up.

Although the tiny island nation accounts for a mere 2 percent of the region's economy, the implications of its controversial bailout terms have made waves far beyond its borders.

Many fear that if the banking levy is eventually employed, it could set a precedent for financing government debt in other countries like Spain and Italy using individual savings accounts.

Cypriot officials have closed banks until March 26th in order to buy time to find a solution. At an emergency meeting on Thursday, the country's parliament is expected to discuss alternative options for financing the nation's debt; including tapping pension funds and brokering a deal with Russia in exchange for untapped natural gas reserves.

BY Laura Brodbeck

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