The price of oil dipped slightly Monday as a report on manufacturing in China signalled that a recovery in the world’s No. 2 economy would continue to be uneven.
Benchmark U.S. crude for January delivery edged 23 cents lower, or 0.2 per cent, to US$96.37 a barrel at midday in Asia in electronic trading on the New York Mercantile Exchange.
China’s massive manufacturing sector grew at a slightly slower pace in December, according to a preliminary survey by HSBC. The purchasing managers’ index report found that the growth rate slowed marginally from the month before, though it was still high enough to indicate that China’s economy is continuing to recover since slowing to 7.5 per cent growth in the second quarter.
Investors were also staying on the sidelines ahead of the U.S. Federal Reserve’s meeting to decide on whether to maintain its $85 billion in monetary stimulus.
Expectations are growing that the Federal Open Market Committee might decide at its meeting, held on Tuesday and Wednesday, to start cutting back on the stimulus following some recent strong U.S. economic data reports and signs of an imminent budget agreement in Congress.
Any reduction of stimulus would likely result in a stronger dollar, making commodities priced in the greenback more expensive to foreign buyers, driving down demand.
Brent crude, a benchmark for international oils, was up 40 cents to $108.72 a barrel on the ICE exchange in London.
In other energy futures trading on the Nymex:
— Wholesale gasoline was little changed at $2.6496 a gallon.
— Heating oil was little changed at $2.983 gallon
— Natural gas dropped 0.1 cents to $4.282 per 1,000 cubic feet.
(TSX:ECA, TSX:IMO, TSX:SU, TSX:HSE, NYSE:BP, NYSE:COP, NYSE:XOM, NYSE:CVX, TSX:CNQ, TSX:TLM, TSX:COS.UN, TSX:CVE)