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Oil rises to near $89 in Asia after Chinese manufacturing data shows sign of recovery
BANGKOK (AP) ¯¯¯ Oil prices inched higher Tuesday in Asia, after sliding on Europe's deepening debt turmoil the day before, as a survey suggested a recovery in China's manufacturing is taking hold.
Benchmark crude for September delivery was up 50 cents at $88.64 a barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract tumbled $3.69, or 4 percent, to settle Monday at $88.14 per barrel in New York after Spain's borrowing costs surged, raising the risk that it will require a financial bailout.
Better data on China's manufacturing provided some respite from the wall of bad news in Europe.
Preliminary results of HSBC's monthly survey of manufacturers showed the contraction in Chinese manufacturing eased in July. The bank's Purchasing Managers' Index which combines various measures of manufacturing activity rose to 49.5 from 48.2. Readings above 50 denote growth.
The individual gauge of factory output showed an expansion in production and was at its highest level in nine months.
HSBC's chief China economist Hongbin Qu said the survey suggests Beijing's attempts to stimulate the world's second-biggest economy are starting to work. "A more meaningful improvement of growth is expected in the coming months when these measures fully filter through."
Brent crude was up 81 cents at $104.07 a barrel on the ICE futures exchange in London.
In other futures trading, heating oil was up 1.8 cents at $2.839 a gallon. Gasoline added 1.6 cents to $2.78 a gallon and natural gas fell 0.5 cent to $3.112 per 1,000 cubic feet.