Oil Below $103 As Chinese Factory Activity Drops
The price of oil slipped below $103 a barrel Thursday after a report indicated that manufacturing in China, the world's second-biggest economy, shrank again in February.
U.S. crude for March delivery fell 39 cents to close at $102.92 a barrel in New York on the last day of trading for the contract. Crude for April delivery fell 9 cents to close at $102.75.
Oil prices fell after a monthly survey by HSBC found that China's manufacturing, a driver of the global economy, contracted for a second straight month.
The HSBC purchasing managers' index also declined to the lowest since July, a sign of the extended slowdown in China as leaders in Beijing try to clamp down on an investment boom and refocus the economy on domestic consumption.
"Results from this private sector survey have deteriorated for four months now, which indicates an unambiguous trend of domestic growth deceleration," Societe Generale economist Wei Yao said in a report.
Uncertainty about protests in Venezuela, a major U.S. oil supplier, as well as export disruptions in Libya and South Sudan kept a floor under oil prices.
Prices were also steadied by a weekly report from the U.S. Energy Department released Thursday that revealed that oil stockpiles grew about half as fast as expected, according to analysts surveyed by Platts, the energy information arm of McGraw-Hill Cos.
Brent crude, a benchmark for international oil used by many U.S. refineries, fell 17 cents to close at $110.30 a barrel on the ICE Futures exchange in London.
U.S. retail gasoline prices continued their seasonal climb as refineries cut back output to perform maintenance and prepare for a switch to more expensive summer gasoline. The average retail price rose less than a penny to $3.38 per gallon. That's the highest level of the year and 10 cents higher than last month.
The price of natural gas fell 1.4 percent to close at $6.06 per 1,000 cubic feet, retreating somewhat after Wednesday's 11 percent surge to $6.15, its highest level since December of 2008.
In other energy futures trading on Nymex:
- Wholesale gasoline rose 2.2 cents to close at $2.847 a gallon.
- Heating oil rose 3.1 cent to close at $3.178 a gallon.
AP writer Pablo Gorondi contributed to this story from Budapest.
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