Crude oil inches down but remains near $104 a barrel after US supply drop

The price of oil drifted lower from a one-month high Thursday but held near $104 a barrel.

By early afternoon in Europe, benchmark U.S. crude for July delivery was down 12 cents to $103.95 a barrel in electronic trading on the New York Mercantile Exchange. On Wednesday, the Nymex contract gained $1.74 to close at $104.07.

Brent crude, a benchmark for international oils, was down 11 cents to $110.44 on the ICE Futures exchange in London.

The U.S. oil price hit a one-month high Wednesday after a report from the Energy Information Administration showed that U.S. crude oil supplies dropped 7.2 million barrels in the week ended May 16. The drop was bigger than analysts expected and due mostly to lower crude imports.

“As refineries ramp up utilization after seasonal maintenance, we could expect to see further drawdowns … which may offer support for WTI toward $105 per barrel in the coming weeks,” said Kash Kamal at Sucden Financial Research in London. West Texas Intermediate is the crude oil grade behind the Nymex contract.

Meanwhile, a monthly HSBC survey showed that the contraction in China’s manufacturing eased in May, but the improvement was not sufficient to boost energy prices.

In other energy future trading in New York.

— Wholesale gasoline fell 0.15 cent to $2.9778 a gallon.

— Natural gas added 2.1 cents to $4.494 per 1,000 cubic feet.

— Heating oil dropped 0.6 cent to $2.9466 a gallon.