Oil slips on weak China manufacturing data, forecast of rising US supplies
The price of oil fell slightly Tuesday but remained above US$101 a barrel, dented by soft Chinese manufacturing figures and expectations of another increase in U.S. crude stockpiles.
By early afternoon in Europe, benchmark U.S. crude for May delivery was down 21 cents to $101.37 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the Nymex contract fell nine cents to $101.58.
Brent crude, used to set prices for international varieties of oil, was down 20 cents to $107.56 a barrel on the ICE exchange in London.
The manufacturing index by the China Federation of Logistics & Purchasing ticked up to 50.3 points in March from 50.2 in February. Economists said the increase should have been a lot stronger because factories typically return to full speed in March after shutting for the extended Lunar New Year holiday, which begins in either January or February each year. The index uses a 100-point scale on which numbers above 50 indicate expansion.
China's economy has slowed after a decade of red-hot expansion as the country's leaders try to reduce reliance on trade and investment and encourage growth based on domestic spending.
Investors will later be monitoring fresh information on U.S. stockpiles of crude and refined products.
Data for the week ending March 28 is expected to show a build of 1.8 million barrels in crude oil stocks and a draw of two million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
Crude stocks have risen 10 weeks in a row, adding over 32 million barrels between mid-January and March 21.
The American Petroleum Institute will release its report on oil stocks later Tuesday, while the report from the Energy Department's Energy Information Administration â€” the market benchmark â€” will be out on Wednesday.
Elsewhere, analysts were skeptical about the success of negotiations to end militias' control over oil export terminals in Libya, which has seen its oil output fall to around 160,000 barrels a day â€” enough to cover domestic demand but leaving little to export.
In other energy futures trading in New York:
â€” Wholesale gasoline fell 0.68 cent to $2.9111 a gallon
â€” Natural gas was down three cents at $4.341 per 1,000 cubic feet.
â€” Heating oil added 0.17 cent to $2.9315 a gallon.
Teresa Cerojano in Manila, Philippines, contributed to this report.
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