AFP reported that oil was up in Asia on trader expectations of a hike in Chinese crude demand after a key survey showed its manufacturing activity hitting a 14 month high in December.
New York's main contract, light sweet crude for delivery in January rose 23% to USD 86.98 a barrel and Brent North Sea crude for February delivery advanced five cents to USD 108.23.
Phillip Futures in a report said that "Oil prices rose on expectations for improved demand in China after data showed the manufacturing sector in the world number two oil consumer expanded in December at its fastest pace in more than a year."
Banking giant HSBC in its preliminary purchasing managers index released recorded China's manufacturing activity at 50.9 in December, the highest the index has reached in 14 months. It was the second straight month that China's manufacturing has hurdled the 50 point mark indicating an expansion after 12 consecutive months of contraction.
China's economic growth hit a more than three year low of 7.4% in the three months to September, but HSBC's PMI, together with a series of data released recently, has fuelled optimism of a Chinese economic rebound.
