Oil below $103 as Chinese factory activity drops
By early afternoon in Europe, benchmark U.S. crude for March delivery was down 46 cents to $102.85 a barrel in electronic trading on the New York Mercantile Exchange.
By Pablo Gorondi
The Associated Press
Oil prices slipped below $103 a barrel Thursday after a report indicated that manufacturing in China, the world's second-biggest economy, shrank again in February.
By early afternoon in Europe, benchmark U.S. crude for March delivery was down 46 cents to $102.85 a barrel in electronic trading on the New York Mercantile Exchange. The contract expires Thursday. The April contract was down 53 cents at $102.31.
Oil prices fell after a monthly survey by HSBC found that China's manufacturing, a pillar of the 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.
Energy markets are also looking ahead to a report by the U.S. Energy Information Administration on U.S. stockpiles of crude and refined products.
The report, due later Thursday, is expected to show an increase of 1.9 million barrels in crude oil stocks and a reduction of 1.3 million barrels in gasoline stocks in the week to Feb. 14, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.
A report from the industry-funded American Petroleum Institute released late Wednesday showed a drop of 470,000 in crude supplies while gasoline stocks added 1.4 million barrels.
Brent crude, a benchmark for international oils, was down 80 cents at $109.67 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline lost 3.11 cents to $2.9657 a gallon.
— Heating oil inched down 1.99 cents to $3.0527 a gallon.
— Natural gas fell 8.6 cents to $6.063 per 1,000 cubic feet.
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