BUSINESS

Benchmark crude little changed at US$89.18 a barrel amid demand uncertainty

04/23/2013 03:38 EDT | Updated 06/23/2013 05:12 EDT
NEW YORK, N.Y. - The price of oil fell slightly Tuesday, as a slowdown in China's manufacturing offset positive news on the U.S. housing sector.

Benchmark West Texas Intermediate crude for June delivery fell a penny to finish at US$89.18 a barrel on the New York Mercantile Exchange.

A report from HSBC Corp. showed that growth in China's manufacturing sector was less than expected, raising more concerns that oil demand could weaken in the world's second-largest oil-consuming country.

Platts, the energy information arm of McGraw-Hill Cos., said Tuesday that China's oil demand was up about two per cent in March from a year ago and that demand in the first quarter was up 3.5 per cent from the same period a year ago. That compares with demand growth of 7.8 per cent in the last three months of 2012.

A report showing that U.S. sales of new homes rose in March to a seasonally adjusted annual rate of 417,000 buoyed oil prices.

Oil dropped in the early afternoon, then recovered, after the Associated Press' Twitter account was hacked and a fake tweet about an attack on the White House was posted. There was no attack, the president was fine and The AP quickly disavowed the tweet.

Investors, meanwhile, are awaiting fresh information on U.S. stockpiles of crude and refined products. On Wednesday the Energy Department is expected to release data for the week ended April 19 showing a build of 1.4 million barrels in crude oil stocks and a draw of 700,000 barrels in gasoline stocks, according to a survey of analysts by Platts.

Brent crude, which is used to price oil used by many U.S. refiners, on Tuesday fell eight cents to end at US$100.31 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the Nymex, wholesale gasoline fell five cents to finish at US$2.72 a U.S. gallon (3.79 litres), heating oil was flat at US$2.81 a gallon and natural gas fell three cents to end at US$4.24 per 1,000 cubic feet.

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