Oil dipped below $95 per barrel Friday after China reported that manufacturing rose at the slowest pace in over two years in June, pointing to a possible slowdown in energy demand, The Associated Press reports.
By early afternoon in Europe, benchmark crude for August delivery was down 69 cents to $94.73 a barrel on the New York Mercantile Exchange after rising $4.16 over the previous two days. On Thursday, the contract settled at $95.42 a barrel.
Trading could be volatile ahead of a long weekend in the U.S., where markets will be closed on Monday for the 4th of July holiday.
Sentiment was hurt after the China Federation of Logistics and Purchasing said its monthly purchasing managers index fell to 50.9 in June, indicating the slowest pace of growth in 28 months. The report said the trend likely augurs a further slowdown in growth brought on by inflation-fighting curbs on credit.
The price of crude eased back from Thursday, when lawmakers in Greece approved final details of a plan that will bring sweeping financial reform to its beleaguered economy and allow it to receive vital rescue loans.
That eased concerns about a spreading financial crisis in Europe, resulting in a strengthening euro against the dollar. That, in turn, gave oil a boost, since it tends to rise as the dollar falls and makes crude barrels cheaper for investors holding other currencies.
Crude has dropped from near $115 early last month amid concerns about slowing global demand.
