Benchmark U.S. crude-oil futures fell in electronic trade Tuesday, with weaker-than-expected factory activity in China highlighting worries about softening energy demand. During Asian trading hours, June oil futures fell 60 cents, or 0.7%, to $88.59 a barrel. Front-month oil futures have slumped more than 8% this month, hurt in part by concerns about lackluster oil demand in a well-supplied market. The next reports on weekly U.S. crude-oil inventories are due out Tuesday and Wednesday. Underscoring demand concerns on Tuesday were data from China — the world's second-largest economy and top oil consumer — that manufacturing-activity growth slowed this month. The preliminary or “flash" version of HSBC's manufacturing Purchasing Managers' Index fell to a two-month low of 50.5 from March's final reading of 51.6. The April result was below a Bloomberg forecast of 51.5. The headline index remained above the 50 mark that divides growth from contraction, but the subindex for new orders showed expansion at slower pace than in March. Also, the subset including new orders destined for export swung to show a decrease. A week ago, it was disappointing quarterly economic growth and monthly industrial-production numbers from China that added to demand concerns for oil. After trading ends Tuesday on the New York Mercantile Exchange, the American Petroleum Institute is slated to issue its weekly report on crude-oil stockpiles at 4:30 p.m. Eastern time. The data are due to be followed by the more closely watched Energy Information Administration report, scheduled for Wednesday at 10:30 a.m. Eastern time. Analysts surveyed by Platts expect, on average, a build of 1.4 million barrels in U.S. crude-oil stocks. “A build of this size — which is roughly a third of the seasonal week-on-week change in the [Energy Information Administration's] five-year average — would put U.S. crude inventories just over 9% above the five-year average of 356.130 million barrels," Platts said in a statement. Analysts polled by Platts also expect a decline of 700,000 barrels in U.S. gasoline inventories, while distillate stocks are projected to be down by 450,000 barrels. Checking prices for other energy products on Tuesday, natural gas for May delivery fell 2 cents, or 0.4%, to $4.25 per million British thermal units. May gasoline futures lost 1 cent, or 0.2%, to trade at $2.76 a gallon, and May heating oil declined less than 1 cent, or 0.3%, to $2.80 a gallon. Marketwatch
