Brent futures dropped today as US manufacturing activity slowed sharply in January, which clouded future oil demand.
According to Reuters, Brent crude dropped by $0.13 to $105.91 a barrel, while US crude gained $0.18 to $96.61 a barrel.
Crude futures fell due to weak US factory data and a sinking stock market with the S&P 500 sinking to its lowest level since October.
The Institute for Supply Management (Ism) said its index of national factory activity slipped to 51.3 last month, its lowest level since May 2013, from 56.5 in December.
Oil prices were also weighed down by weak factory output in China, which eased to a six-month low in January for the world’s second largest oil consumer.
But crude prices gained support in the early session as the US ultra-low sulfur diesel (ULSD), known more commonly as heating oil, settled a penny higher at $3.0075 per gallon, which was previously increased around two cents to a session high of $3.0185.
Libya’s El-Sharara oilfield production dropped to 175,000bpd due to bad weather at western ports, while political clashes increased as Prime Minister Ali Zeidan said he has ordered troops to prepare to move to end their blockade, supporting oil prices.
Prices also received support from output glitches at the North Sea Buzzard oilfield, the largest of the fields that contribute to the Forties crude blend and which underpins the crude.
Market players are also watching Syria, which continues to worry markets amid concerns that the crisis there could spread across the Middle East to engulf major exporters.
Investors have turned their focus on refiners moving into maintenance that would curb demand for crude oil.
Oil traders are waiting for the American Petroleum Institute and the US Energy Information Administration data which is scheduled later this week.
Image: Frigid winter increases heating oil demand in the US and Europe. Photo: courtesy of Rawich.