Oil falls as China manufacturing slows

Tuesday 23 April 2013 19.27
Oil prices lower after Chinese economic data
Oil prices lower after Chinese economic data

The price of oil has fallen slightly, as a slowdown in China's manufacturing offset positive news on the US housing sector.

Benchmark oil for June delivery fell 1 cent to $89.18 a barrel in afternoon trading on the New York Mercantile Exchange.

A report from HSBC Corp showed that growth in China's manufacturing sector was less than expected, raising more concerns that oil demand could weaken in the world's second-largest oil-consuming country.

Platts, the energy information arm of McGraw-Hill Cos, said that China's oil demand was up about 2% in March from a year ago and that demand in the first quarter was up 3.5% from the same period a year ago.

That compares with demand growth of 7.8% in the last three months of 2012.

A report showing that US sales of new homes rose in March to a seasonally adjusted annual rate of 417,000 helped pare the losses seen following the China data.

Oil dropped in the early afternoon, then recovered, after the Associated Press' Twitter account was hacked and a fake tweet about an attack on the White House was posted.

Investors are awaiting fresh information on US stockpiles of crude and refined products.

Data for the week ending April 19 is expected to show a build of 1.4 million barrels in crude oil stocks and a draw of 700,000 barrels in gasoline stocks, according to a survey of analysts by Platts.

The American Petroleum Institute will release its report on oil stocks later, while the report from the Energy Department's Energy Information Administration - the market benchmark - will be out tomorrow.

Brent crude, which is used to price oil used by many US refiners, fell 16 cents to $100.20 a barrel on the ICE Futures exchange in London.