Oil prices skyrocketed to a one-week high as U.S. manufacturing has unexpectedly expanded in September from June.
Bloomberg reported futures rose 0.3 percent as the Institute for Supply Management’s U.S. factory index increased to 51.5 in September from 49.6 a month earlier, exceeding the median forecast in a Bloomberg survey.
“The ISM came in better than expected, which is certainly helping the market,” said Kyle Cooper, director of commodities research at IAF Advisors. “It wasn’t huge, but it was above 50, which signals growth.”
Crude oil for November has seen a rise of 29 cents to $92.48 a barrel on the New York Mercantile Exchange, the highest settlement since Sept. 21, the report revealed.
The increase could signal that manufacturing is picking up in the US, after a weakening this spring because of declining consumer demand and a drop in exports, SMH reported.
Improvements in the United States comes even while growth is slowing globally. Europe’s financial crisis has pushed many countries in the region into recession. Emerging nations such as China and India have also slowed down, with China’s manufacturing contracting for the 11th straight month.
Australian manufacturing has also suffered another contraction, the Performance of Manufacturing Index fell to 44.1 points in September, well below the contraction mark of 50.