Oil prices retreat following lackluster China data

The Associated Press

Oil prices fell Thursday as lackluster data from China overshadowed news that oil started flowing through a new pipeline to the U.S. Gulf Coast.

Benchmark U.S. crude for March delivery was down 24 cents to $96.49 a barrel at 0535 GMT in electronic trading on the U.S. Mercantile Exchange.

A preliminary manufacturing index for China fell to 49.6 in January, below the 50 level that signifies expansion and a six-month low, according to HSBC Holdings Plc and Markit Economics. In December the index was at 50.5.

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Oil rose nearly 2 percent, or $1.76, to $96.73 on Wednesday following the opening of the southern leg of the Keystone pipeline, which is expected to eventually bring 500,000 barrels of crude oil a day to the Gulf Coast. With demand expected to rise, the price of the U.S. oil rose closer to that of more-expensive imports.

Oil last closed above $96 a barrel on Dec. 31.

Brent crude, a benchmark for international oils, was down 22 cents to $108.05 a barrel on the ICE exchange in London.

Natural gas futures remained firm, up 4.8 cents at $4.737 per 1,000 cubic feet, as temperatures in many parts of the U.S. Northeast remained in the single digits, boosting demand.

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The deep chill blanketing much of the central and eastern U.S. is expected to keep demand high following a big snowstorm on Tuesday.

In other energy futures trading on Nymex:

— Wholesale gasoline edged 1 cent lower to $2.678 per gallon.

— Heating oil was almost unchanged at $2.978 a gallon.

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