A rebound in manufacturing in China and Europe and falling U.S. stockpiles of crude pushed the price of oil above $104 a barrel Thursday as traders braced for the Federal Reserve to start phasing out its monetary stimulus.
By early afternoon in Europe, benchmark oil for October delivery was up 25 cents to $104.10 a barrel in electronic trading on the New York Mercantile Exchange. The contract dropped $1.26 to close Wednesday at $103.85.
The eurozone's purchasing managers' index, a key gauge of growth in both the manufacturing and services sectors, rose to 51.7 points in August from 50.4 in July, according to financial information company Markit. It was the highest reading since June 2011 and supported expectations that the eurozone's recovery from recession is gaining momentum.
HSBC Corp. said the preliminary version of its monthly PMI for Chinese manufacturing rose to 50.1 for August, a sharp improvement from July's figure of 47.7.
The figures helped divert investors' attention away from the question of when the Fed will begin to reduce its monetary stimulus.
The program was intended to push down interest rates and spark investment, but also weighed on the dollar's value. The dollar has crept up in recent days amid expectations that the Fed will gradually reduce its purchases of Treasurys and other bonds.