Oil falls below $94 on weak outlook for demand

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Associated Press

Posted on May 24, 2013 at 2:03 AM

Updated Friday, May 24 at 2:00 PM

The price of oil was knocked below $94 a barrel Friday by a combination of ample supplies and lukewarm demand.

By early afternoon in Europe, benchmark oil for July delivery was down 70 cents to $93.55 a barrel in electronic trading on the New York Mercantile Exchange.

On Thursday, the Nymex contract fell as low as $92.91 after weak manufacturing data from China raised questions about the strength of oil demand in the world's No. 2 economy. It closed at $94.25 a barrel in New York, down 3 cents.

"It seems that the recent disappointing macro numbers from China continue to weigh on market sentiment, raising further concerns about a slowdown in the oil demand," said a report from Sucden Financial Research in London.

The American Petroleum Institute had said in a statement Wednesday that U.S. crude oil stocks for April ended at 388.9 million barrels, the highest inventory level for the month since 1981.

Traders were awaiting the release by the U.S. Commerce Department of durable goods orders for April for the latest clues on the health of the U.S. economic recovery.

Trading volumes are expected to be lower than usual Friday ahead of Monday's Memorial Day holiday.

Brent crude, a benchmark for many international oil varieties, was down 23 cents to $102.17 a barrel on the ICE Futures exchange in London.

In other energy futures trading on Nymex:

— Wholesale gasoline fell 0.78 cent to $2.8103 a gallon.

— Heating oil lost 1.41 cents to $2.8424 a gallon.

— Natural gas retreated 2.2 cents to $4.239 per 1,000 cubic feet.

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Pamela Sampson in Bangkok contributed to this report.

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