Oil gained for a second day in New York as European leaders made progress with their debt rescue fund, while economic data from Asia signalled that growth is holding up in the region's two biggest crude consumers.
Futures climbed as much as 1.4 per cent after reports showed Japanese exports rose more than forecast last month and Chinese manufacturing may expand at the fastest pace in five months in October. Europe may agree on a blueprint to rein in the debt crisis at a summit tomorrow after leaders on Sunday said they'll aid banks.
"The narrative is that weak demand in developed economies is more than offset by burgeoning demand in developing ones," said Christopher Bellew, a broker at Jefferies Bache Ltd in London. "Chinese demand growth is likely to prevent prices from falling through the floor."
Oil for December delivery was at $87.90 (Dh322) a barrel. Japanese exports rose 2.4 per cent in September from a year earlier as demand for cars and auto parts increased, the Ministry of Finance said in Tokyo yesterday. China's manufacturing may expand this month for the first time since June, according to a preliminary index of purchasing managers by HSBC Holdings and Markit Economics.
Hedge funds boosted bullish bets on oil by the most in five weeks, a report on Friday showed. In London, hedge funds and other money managers boosted bullish bets on Brent crude by 32 per cent in the week ended October 18, according to data from ICE Futures Europe.
Speculative bets that prices will rise, in futures and options combined, outnumbered short positions by 54,208 contracts, the London-based exchange said yesterday in its weekly Commitment of Traders report. Net-long positions rose by 13,204 contracts, from 41,004 a week earlier.