Oil prices fell Thursday as lackluster data from China overshadowed news that oil started flowing through a new pipeline to the US Gulf Coast.
Benchmark US crude for March delivery was down 24 cents to US$96.49 a barrel at 0535 GMT in electronic trading on the US 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 Holdings Plc and Markit Economics. In December the index was at 50.5.
Oil rose nearly two per cent, or US$1.76, to US$96.73 on Wednesday following the opening of the southern leg of the Keystone pipeline, which is expected to eventually bring 500,000 barrels of crude oil a day to the Gulf Coast. With demand expected to rise, the price of the US oil rose closer to that of more-expensive imports.
Oil last closed above US$96 a barrel on December 31.
Brent crude, a benchmark for international oils, was down 22 cents to US$108.05 a barrel on the ICE exchange in London.
Natural gas futures remained firm, up 4.8 cents at US$4.737 per 1,000 cubic feet, as temperatures in many parts of the US Northeast remained in the single digits, boosting demand.
The deep chill blanketing much of the central and eastern US is expected to keep demand high following a big snowstorm on Tuesday.
