Oil futures ended nearly flat Tuesday, as traders shrugged off weak global manufacturing data and a fake tweet that rattled investors and focused on an upswing in the stock market.
Light, sweet crude for June delivery settled a penny lower at $89.18 a barrel on the New York Mercantile Exchange. Brent crude on the ICE futures exchange fell eight cents, or 0.1%, to $100.31 a barrel.
Futures began the day lower after a series of weak readouts on April manufacturing from China and the U.S. But a steady climb in U.S. equities, which often guides the crude-oil market, pulled prices higher throughout the day, traders said.
"The only reason crude oil is up today is because the stock market is roaring," said Mark Waggoner, president of Excel Futures, a commodities brokerage based in New York.
Prices fell as much as 70 cents midway through the session on surging volume after a fake tweet purported to be from The Associated Press said two explosions occurred at the White House, injuring President Barack Obama. The news agency later said it had been hacked, and futures recovered their losses within about five minutes.
Other markets were also rattled by the false alarm. The Dow Jones Industrial Average fell about 150 points, while gold prices rose and natural gas futures slid. Traders said the move reflected an exit out of risky assets rather than concerns about oil specifically.
"That sort of stuff gets our attention, as you can imagine...but it was immediately met with skepticism," said Peter Donovan, vice president of Vantage Trading, an oil options brokerage.
Overnight, the preliminary HSBC China manufacturing purchasing manager's index, or PMI, fell to 50.5 in April, down from 51.6 the month before. A reading above 50 indicates growth.
Later, a PMI reading on the U.S. for April fell to 52 in April, the lowest level in six months.
Traders follow data such as monthly PMI and other indicators because they often offer hints about broader economic health and demand for crude oil. The U.S. and China are the world's largest and second-largest consumers of oil, respectively.
A series of disappointing economic headlines out of both countries in recent months have renewed fears about the sluggish pace of oil demand growth. China has been a major engine of commodity demand growth in recent years, yet earlier in the month a reading on first-quarter economic growth in China fell below expectations, helping to trigger a recent round of widespread selling in commodities.
China's PMI reading "is a further confirmation that the Chinese economy is just driving along in cruise-control rather than flying away," said Olivier Jakob, head of the Swiss oil consultancy PetroMatrix.
Front-month May reformulated gasoline blendstock, or RBOB, settled 5.04 cents higher, or 1.8%, at $2.7190 a gallon. May heating oil settled 0.23 cent, or 0.1%, higher at $2.8117 a gallon.
Copyright (c) 2012 Dow Jones & Company, Inc.
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