Oil drops below $88 as China manufacturing slows
BANGKOK (AP) — The price of oil fell below $88 a barrel Tuesday after a slowdown in China's manufacturing added to the outlook for subdued demand.
Benchmark oil for June delivery was down $1.29 to $87.91 per barrel at late afternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The expired contract for May rose 75 cents to finish at $88.76 on Monday.
HSBC Corp. said Tuesday the preliminary version of its monthly purchasing managers' index for China declined to a worse-than-expected 50.5 in April from March's 51.6 on a 100-point scale. Readings above 50 indicate expansion.
"It's another piece in the jigsaw that adds to the potential scenario of moderating growth in China, and the manufacturing sector in particular, and is probably driving things a bit lower at the moment," said Ric Spooner of CMC Markets in Sydney.
Last week, China's government said that first-quarter economic growth unexpectedly declined to 7.7 percent from the previous quarter's 7.9 percent.
Any negative trends in China's economy can cause the price of crude to fall since the country is the world's biggest oil importer.
In London, the June contract for Brent crude, which is used to price oil used by many U.S. refiners, was down $1.276 to $99.13 a barrel on the ICE futures exchange.
In other energy futures trading on the Nymex:
— Gasoline fell 3.3 cents to $2.728 per gallon.
— Heating oil fell 2.5 cents to $2.77 a gallon.
— Natural gas fell 1.2 cents to $4.255 per 1,000 cubic feet.
Copyright 2013 The Associated Press.