Crude prices gain on Chinese data, Fed outlook, U.S. Fed outlook

Investing.com - Oil prices rose on Thursday after Chinese output data beat expectations, while soft U.S. labor-market data kept expectations alive that the Federal Reserve will keep monetary policy loose, which further bolstered crude.

On the New York Mercantile Exchange, light sweet crude futures for delivery in December traded at USD96.97 a barrel during U.S. trading, up 0.11%.

The commodity hit a session low of USD95.96 and a high of USD97.69. The December contract settled down 1.46% at USD96.59 a barrel on Wednesday

The preliminary reading of China’s HSBC manufacturing index for October rose to a seven-month high of 50.9, up from a final reading of 50.2 in September. Economists had expected the index to tick up to 50.5.

China is the world's second-largest consumer of crude, and the numbers sparked hopes that demand will strengthen in the Asian giant.

Meanwhile in the U.S., the Department of Labor reported earlier that the number of individuals filing for initial jobless benefits declined by 12,000 to a seasonally adjusted 350,000. Analysts had expected U.S. jobless claims to fall by 22,000 to 340,000 last week.

Earlier this week, the Department of Labor reported that U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.

While the jobs figures painted a picture of a sluggish U.S. economy, the numbers did fuel expectations for the Federal Reserve to continue stimulating the economy with its USD85 billion in monthly bond purchases that drive down interest rates to spur recovery, weakening the greenback in the process.

A weaker greenback makes oil an attractive buy on dollar-denominated exchanges.

Many in recent weeks were expecting the Fed to announce plans to taper its asset purchases in late October or early December, though soft jobs data now have market watchers pushing back estimates for a start date to tapering into 2014.

Elsewhere, U.S. supply data released Wednesday watered down gains.

The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories rose by 5.2 million barrels in the week ended Oct. 18, above expectations for an increase of 3 million barrels, stoking fears the country is awash in crude.

Total U.S. crude oil inventories stood at 379.8 million barrels, the highest level since June.

Meanwhile on the ICE Futures Exchange, Brent oil futures for November delivery were down 0.75% at USD106.99 a barrel, up USD10.02 from its U.S. counterpart.