THE price of oil is up slightly on signs that China's manufacturing is getting stronger.

A survey of manufacturers yesterday suggested that factory activity in China rebounded to its highest level in nine months. Worries about weakening demand in China - the world's No. 2 oil consumer - and Europe's debt crisis, pushed down oil prices the past few days.

The HSBC manufacturing index rose to 49.5 from 48.2 for Chinese companies. Anything above 50 suggests the sector is growing.

In Europe, meanwhile, leaders are struggling to contain a debt crisis. Borrowing costs for Spanish debt have jumped to levels that are considered unsustainable, and Moody's Investors Service said there's an "increased likelihood" that Greece would leave Europe's monetary union.

The manufacturing survey was a good sign, "but the question is sustainability," said Phil Flynn, an analyst with Price Futures Group. "If Europe's economy falls apart, who are the Chinese going to export to?"

Benchmark US crude rose by 36 cents to end the day at US$88.50 per barrel in New York. Brent crude, which sets the price for imported oil, climbed by 16 cents to finish at US$103.42 per barrel in London.

In other energy futures trading, natural gas rose by 7 cents to finish at US$3.1870 per 1,000 cubic feet. Natural gas prices have jumped this summer to the highest levels since December, though it's still nearly 30 percent cheaper than the same time last year.

Heating oil fell added less than a penny to finish at US$2.8244 per gallon, while wholesale gasoline fell 5.81 cents to finish at US$2.8248 per gallon.

Source:shanghaidaily.com