Oil down on China factory data, US supply forecast

Published on NewsOK Modified: April 1, 2014 at 12:39 pm •  Published: April 1, 2014
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The price of oil fell 1.6 percent Tuesday to just below $100 a barrel, dented by soft Chinese manufacturing figures and expectations of another increase in U.S. crude stockpiles.

Benchmark U.S. crude for May delivery was down $1.61 to $99.97 a barrel in New York. Brent crude, used to set prices for international varieties of oil used by many U.S. refineries, was down $1.72 to $106.04 a barrel in London.

Data showing weak manufacturing growth in China suggested oil demand growth could slow at the same time world supplies remain ample. Also, analysts say, tensions between Russia and Ukraine appeared to be easing somewhat, making it less likely that sanctions that could disrupt world oil supplies will be adopted.

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.

"The hike was the smallest March upswing on record and suggests continued slowing in the country's manufacturing activity," wrote energy analyst Jim Ritterbusch in a report Tuesday.

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.