Investing.com - Crude oil futures were little changed near the highest level in two weeks during European morning hours on Monday, as sentiment remained mildly supported following the release of upbeat Chinese manufacturing data.
Gains were limited amid uncertainty over whether U.S. lawmakers can avert the "fiscal cliff", USD600 billion worth of tax increases and spending cuts that will be automatically triggered on January 1 unless Democrats and Republicans agree how to cut the deficit.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD88.99 a barrel during European morning trade, up 0.1% on the day.
New York-traded oil prices traded in a range between USD88.80 a barrel, the daily low and a session high of USD89.30 a barrel, the strongest level since November 19.
Market sentiment found support after a report from HSBC released earlier confirmed that manufacturing activity in China expanded for the first time in more than a year last month.
The final version of China’s HSBC Purchasing Managers Index rose to 50.5 in November from a final reading of 49.5 in October.
The data came after a report from the state-affiliated China Federation of Logistics and Purchasing over the weekend, which showed manufacturing activity improved to a seven-month high of 50.6 in November, up 0.4 point over October.
The upbeat data added to signs of growth recovery in the world’s second largest oil consumer.
Weakness in the dollar also contributed to oil’s strength. The euro hit a six-week high against the greenback, while the dollar index was down 0.3% to trade at 79.97, the weakest level since November 1.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
But gains were limited as investors remained concerned over the looming fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline.
House of Representatives Speaker John Boehner spooked investors on Friday after saying there was a stalemate between Republicans and President Barack Obama’s administration.
He added that President Obama’s proposal of USD1.6 trillion in new tax revenue and less than USD400 billion in spending cuts was not “serious.”
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011 and tip the country back into a recession.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
In the euro zone, finance ministers from the region were to hold talks in Brussels later in the day to discuss the terms of the new Greek aid deal, as well as details of an EUR10 billion bailout for Cyprus.
On Friday, German lawmakers approved the latest aid package for Greece by a large majority, clearing the way for the country to receive EUR44 billion in loans.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery eased up 0.05% to trade at USD111.28 a barrel, with the spread between the Brent and crude contracts standing at USD22.29 a barrel.
Gains were limited amid uncertainty over whether U.S. lawmakers can avert the "fiscal cliff", USD600 billion worth of tax increases and spending cuts that will be automatically triggered on January 1 unless Democrats and Republicans agree how to cut the deficit.
On the New York Mercantile Exchange, light sweet crude futures for delivery in January traded at USD88.99 a barrel during European morning trade, up 0.1% on the day.
New York-traded oil prices traded in a range between USD88.80 a barrel, the daily low and a session high of USD89.30 a barrel, the strongest level since November 19.
Market sentiment found support after a report from HSBC released earlier confirmed that manufacturing activity in China expanded for the first time in more than a year last month.
The final version of China’s HSBC Purchasing Managers Index rose to 50.5 in November from a final reading of 49.5 in October.
The data came after a report from the state-affiliated China Federation of Logistics and Purchasing over the weekend, which showed manufacturing activity improved to a seven-month high of 50.6 in November, up 0.4 point over October.
The upbeat data added to signs of growth recovery in the world’s second largest oil consumer.
Weakness in the dollar also contributed to oil’s strength. The euro hit a six-week high against the greenback, while the dollar index was down 0.3% to trade at 79.97, the weakest level since November 1.
Oil prices typically strengthen when the U.S. currency weakens as the dollar-priced commodity becomes cheaper for holders of other currencies.
But gains were limited as investors remained concerned over the looming fiscal cliff in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1, unless a divided Congress and the White House can work out a compromise in the four weeks left before the deadline.
House of Representatives Speaker John Boehner spooked investors on Friday after saying there was a stalemate between Republicans and President Barack Obama’s administration.
He added that President Obama’s proposal of USD1.6 trillion in new tax revenue and less than USD400 billion in spending cuts was not “serious.”
There are fears that U.S. lawmakers will repeat the same political divisiveness that led Standard & Poor's to downgrade the U.S.’s AAA rating in August 2011 and tip the country back into a recession.
The U.S. is the world’s biggest oil-consuming country, responsible for almost 22% of global oil demand.
In the euro zone, finance ministers from the region were to hold talks in Brussels later in the day to discuss the terms of the new Greek aid deal, as well as details of an EUR10 billion bailout for Cyprus.
On Friday, German lawmakers approved the latest aid package for Greece by a large majority, clearing the way for the country to receive EUR44 billion in loans.
Elsewhere, on the ICE Futures Exchange, Brent oil futures for January delivery eased up 0.05% to trade at USD111.28 a barrel, with the spread between the Brent and crude contracts standing at USD22.29 a barrel.