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Global factory activity gathers pace in May

Published Friday, May 23rd, 2014

Yesterday’s performance of the stock and oil markets is somewhat surprising given the quality of the news and data that filtered through the day. The day kicked off with encouraging Chinese and Japanese factory activity. The composite PMI in the Eurozone stayed firmly above 50 this month whilst the US manufacturing index also strengthened month-on-month. The rise in April’s existing home sales also indicates that the US economy is doing its best to recover. Fingers can be pointed at the 28,000 jump in US jobless claims, however, the absolute figure of 326,000 is still very close to a 7-year low. Both the DJIA and the S&P 500 indices registered small gains and the MSCI’s world equity index finished the day 0.4% higher.

The optimism should persist today as Spain’s credit rating was upgraded a notch by Standard and Poor and the German economy expanded 0.8% in the first quarter of the year compared to 4Q 2013 and 2.5% from a year ago. The fact that the Dutch far right Freedom Party is suggested to have fared much worse than expected in the EU parliamentary elections is also seen supportive for European shares.

Discrepancy in April US oil demand data

The oil market was relatively quiet with every contract losing a little bit of value on the day with the exception of RBOB. WTI managed a range of a mere 65 cents/bbl. The NYMEX crude oil benchmark lost 33 cents/bbl on the day and Brent closed 19 cents/bbl lower. Heating Oil shed 26 points from Wednesday’s settlement but RBOB managed to settle 116 points higher.

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Posted by Tamas Varga

Tamas Varga has been in the oil industry since 1992 and with PVM for 18 years. During his time in the industry he has gathered a range of experience in the oil markets. At PVM Tamas is in charge of data collection and analysis.