Watch CBSN Live

Oil hovers near $89 as China production improves

BANGKOK The price of oil hovered around $89 a barrel Monday as investors focused on signs that China's economy may be picking up after a prolonged slowdown.

Benchmark crude for January delivery was up 2 cents to $88.93 a barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract rose 84 cents to close at $88.91 in New York on Friday.

Surveys by the state-sanctioned China Federation of Logistics & Purchasing and HSBC Corp. showed China's manufacturing is expanding.

Signs of recovery in a major economy typically herald an increase in energy consumption and therefore push oil prices higher.

In Europe, German lawmakers approved further aid to Greece on Friday, raising hopes that Europe will continue to slowly heal from its debt crisis. Increased European economic activity could also push up global oil demand.

Oil had its first monthly gain in four months in November, but is still trading below the 2012 average of $94.65 per barrel.

In London, Brent crude was up 3 cents at $111.26.

In other energy futures trading on the New York Mercantile Exchange:

- Heating oil was unchanged at $3.061 per gallon.

- Wholesale gasoline rose 0.1 cent to $2.731 per gallon.

- Natural gas rose 3.7 cents to $3.598 per 1,000 cubic feet.

View CBS News In