Oil Extends Decade-Best Run as Equities Rally on China Data

Oil extended gains toward $61 a barrel in New York on signs China’s economy is stabilizing, and as investors hope for a breakthrough in the country’s trade talks with the U.S. that will resume this week.

Crude futures rose as much as 1.2 percent, following their strongest quarter since 2009. China’s manufacturing PMI eased worries over the global economic outlook and boosted sentiment across financial markets. Chinese Vice Premier Liu He is set to travel to Washington to meet U.S. negotiators from Wednesday, and sit down with President Donald Trump. The dollar dropped after four days of gains, also helping crude higher.

“Positive risk sentiment as gauged by rising equity markets, and a weaker dollar are helping oil,” UBS Group AG analyst Giovanni Staunovo wrote in a report.

Oil rallied 32 percent in the first quarter as Saudi Arabia led the Organization of the Petroleum Exporting Countries and its allies in squeezing supplies to prevent a glut. Unplanned supply losses from Venezuela and Iran have also helped prices rise, but the trade war between the world’s two biggest economies and signs of slowing global growth have limited further gains.

West Texas Intermediate for May delivery gained 44 cents, or 0.7 percent, to $60.58 a barrel on the New York Mercantile Exchange at 11:13 a.m. in London. The contract rose 1.4 percent on Friday. It climbed the most since June 2009 last quarter.

Brent for June settlement was 1.3 percent higher at $68.45 a barrel on the London-based ICE Futures Europe exchange. The May contract expired Friday. The global benchmark crude was at a premium of $7.67 to WTI for the same month.

China’s manufacturing purchasing managers index recorded its biggest increase since 2012 last month, exceeding all estimates by economists. The news lifted equity markets from Europe to Asia, with Hong Kong’s Hang Seng index settling in a bull market.

The Bloomberg Dollar Spot Index dropped as much as 0.2 percent. A weaker greenback makes commodities priced in the U.S. currency more attractive.

Other oil-market news Saudi Aramco was the world’s most profitable company in 2018, easily surpassing U.S. behemoths including Apple Inc. and Exxon Mobil Corp., according to an extract of the firm’s accounts published by Fitch Ratings. Working oil rigs in the U.S. fell by eight last week to 816, according to data by oilfield-services provider Baker Hughes on Friday. The weekly rig count has only risen three times in 2019. Hedge funds’ wagers on rising benchmark oil prices in New York and London have jumped to the highest levels since October as fresh evidence of tightening global supplies emerged. Russian Energy Minister Alexander Novak and his Iranian counterpart, Bijan Namdar Zanganeh, are set to discuss a possible extension of the OPEC+ agreement that expires in June during a meeting on Monday.