The price of oil hovered around $96 a barrel Thursday, with gains capped by lackluster economic data from China and a report of rising U.S. stockpiles of crude.
By early afternoon in Europe, benchmark U.S. crude for March delivery was up 8 cents at $96.11 a barrel in electronic trading on the New York Mercantile Exchange.
A preliminary manufacturing index for China fell to 49.6 in January, below the 50 level that signifies expansion and a six-month low, according to HSBC and Markit Economics. That suggests demand will drop in the world's second-largest economy.
That was echoed in a report by the American Petroleum Institute, which said U.S. crude stocks rose 4.9 million barrels last week. Analysts polled by Platts, the energy information arm of McGraw-Hill Cos., had predicted a draw of 1.9 million barrels. The report from the Energy Department's Energy Information Administration — the market benchmark — will be out on Wednesday.
If the stock build is confirmed, it would be the first rise in eight weeks.
The reports put a dent in market sentiment, which had been buoyant on Wednesday, when the Nymex contract rose $1.76 to $96.73 following the opening of the southern leg of the Keystone pipeline, which is expected to eventually bring up to 700,000 barrels of crude oil a day to the Gulf Coast. With demand expected to rise, the price of the U.S. oil rose closer to that of more-expensive imports.
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