BLBG: Crude Declines in New York Amid European Growth
Oil dropped to a six-week low as euro-region manufacturing contracted, overshadowing expansion in China, the world’s second-biggest crude consuming country.
Futures in New York fell as much as 0.9 percent after London-based Markit Economics said euro-area manufacturing declined for an eighth month in March, adding to signs the 17- country economy continued to shrink in the first quarter. Prices climbed earlier on China’s Purchasing Managers’ Index.
“We have a real mixed bag of economic news to look at today,” said Phil Flynn, vice president of research at PFGBest in Chicago. “Concerns about Europe are overwhelming everything else. The Chinese manufacturing data was quite good and sent us higher earlier.”
Crude oil for May delivery fell 84 cents, or 0.8 percent, to $102.18 a barrel at 9:33 a.m. on the New York Mercantile Exchange. Earlier, futures touched $102.06 a barrel, the lowest level since Feb. 13. Prices are up 3.4 percent this year.
Brent oil for May settlement dropped 98 cents, or 0.8 percent, to $121.90 a barrel on the London-based ICE Futures Europe exchange.
The European manufacturing gauge, based on a survey of purchasing managers, fell to 47.7 from 49 in February, remaining below the 50 line that divides expansion from contraction, London-based Markit Economics said today. That’s in line with Markit’s initial estimate.
Chinese Economy
The Purchasing Managers’ Index rose to 53.1 last month from 51 in February, China’s logistics federation and the National Bureau of Statistics said. The gauge has a pattern of rising each March.
China was responsible for 11 percent of global oil demand in 2010, according to BP Plc (BP/)’s Statistical Review of World Energy released in June. The U.S. consumed 21 percent of the world’s supply. The 17 countries using the euro accounted for about 12 percent of world use.
“High oil prices, while superficially benefiting producers, may yet be a curse for the economic recovery,” said Christopher Bellew, a senior broker at Jefferies Bache Ltd. in London, who correctly predicted Brent crude’s rise to more than $120 a barrel this year. “It’s far from clear in which direction the market will break out of this range, but right now it looks as if people are betting on a move lower.”
Futures in New York gained 4.2 percent in the first three months of the year, a second quarterly advance.
To contact the reporter on this story: Mark Shenk in New York at mshenk1@bloomberg.net
To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net
