Oil prices fall below $94 a barrel after China manufacturing contracts in May
{{#rendered}} {{/rendered}}The price of oil fell below $94 per barrel Thursday after a private survey showed manufacturing activity in China falling to its lowest level in seven months, a sign that the recovery in the world's No. 2 economy is fading.
Benchmark oil for July delivery was down 81 cents to $93.47 per barrel at midafternoon Bangkok time in electronic trading on the New York Mercantile Exchange. The contract declined $1.90 to close at $94.28 a barrel on Wednesday.
HSBC Corp. said a preliminary version of its monthly purchasing managers' index fell to 49.6 for May from 50.4 in April. Numbers below 50 indicate contraction. Oil prices fell since a downturn in energy-hungry China would likely lead to a decline in crude demand.
{{#rendered}} {{/rendered}}"I think the economic slowdown in Europe, the U.S. and Japan is finally hurting China," said Francis Lun, chief economist at GE Oriental Financial Group in Hong Kong. "It confirms a pattern since the beginning of the year of a slow decline in the manufacturing sector."
Stock markets in Asia fell sharply and Japan's Nikkei 225 plunged more than 7 percent as a spike higher in government bond yields and the Chinese data sparked a correction that traders said was inevitable given the benchmark's remarkable 50 percent gain this year before Thursday's plunge.
Brent crude, a benchmark for many international oil varieties, dropped $1.02 to $101.59 a barrel on the ICE Futures exchange in London.
{{#rendered}} {{/rendered}}In other energy futures trading on Nymex:
— Wholesale gasoline fell 1.6 cents to $2.796 a gallon.
— Heating oil lost 2.2 cents to $2.847 a gallon.
{{#rendered}} {{/rendered}}— Natural gas rose 3.1 cents to $4.217 per 1,000 cubic feet.