The price of oil recovered slightly on Thursday, after a large fall the previous day, thanks to a survey showing China's manufacturing sector is on the upswing.
By early afternoon in Europe, benchmark oil for March delivery was up 29 cents to $95.52 a barrel in electronic trading on the New York Mercantile Exchange.
On Wednesday, the contract dropped $1.45 after crude shipments through the Seaway pipeline from Cushing, Oklahoma, to refineries on the Gulf Coast had to be cut to less than half because of limited endpoint capacity.
Sentiment was bolstered on Thursday, however, by hopes that demand in China may be rising. HSBC's monthly purchasing managers' index, which gauges manufacturing activity in China, rose for the fifth consecutive month in January to 51.9 from December's 51.5. Readings above 50 on the 100-point scale indicate expansion. More manufacturing means more energy consumption, which should push oil prices higher.
The report is further evidence that China's economy is undergoing a modest recovery from a downturn sparked by the 2008 world financial crisis. The Chinese economy expanded 7.9 percent in the final quarter of last year, up from 7.4 percent in the previous quarter, according to data released earlier this month.
Brent crude, used to price international varieties of oil, was down 16 cents to $112.64 per barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
— Wholesale gasoline lost 0.85 cent to $2.8404 per gallon.
— Natural gas rose 0.9 cent to $3.563 per 1,000 cubic feet.
— Heating oil fell 0.18 cent to $3.0634 a gallon.
Pamela Sampson in Bangkok contributed to this report.
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