Oil prices down on China factory data, US supply forecast

PABLO GORONDI, Associated Press
FILE - In this July 26, 2011, file photo, a worker hangs from an oil derrick outside of Williston, N.D. Justin Kringstad, the director of the North Dakota Pipeline Authority said proposed increases of tar sands oil from Canada likely will not have an impact on the state's soaring oil production. Kringstad said refinery destinations for the two crudes may differ because heavy sour crude from Alberta's tar sands is of lower-value and more difficult to refine than North Dakota's light sweet crude. (AP Photo/Gregory Bull, File)
Copyright 2014, The Associated Press

The price of oil fell slightly Tuesday but remained above $101 a barrel, dented by soft Chinese manufacturing figures and expectations of another increase in U.S. crude stockpiles.

By early afternoon in Europe, benchmark U.S. crude for May delivery was down 21 cents to $101.37 a barrel in electronic trading on the New York Mercantile Exchange. On Monday, the Nymex contract fell 9 cents to $101.58.

Brent crude, used to set prices for international varieties of oil, was down 20 cents to $107.56 a barrel on the ICE exchange in London.

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.

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.

Investors will later be monitoring fresh information on U.S. stockpiles of crude and refined products.

Data for the week ending March 28 is expected to show a build of 1.8 million barrels in crude oil stocks and a draw of 2 million barrels in gasoline stocks, according to a survey of analysts by Platts, the energy information arm of McGraw-Hill Cos.

Crude stocks have risen 10 weeks in a row, adding over 32 million barrels between mid-January and March 21.

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

Elsewhere, analysts were skeptical about the success of negotiations to end militias' control over oil export terminals in Libya, which has seen its oil output fall to around 160,000 barrels a day — enough to cover domestic demand but leaving little to export.

 

Teresa Cerojano in Manila, Philippines, contributed to this report.
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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