Oil slips as China manufacturing slows

A child peels an orange at a wholesale market in Huai'an, Jiangsu province January 31, 2008. Chinese inflation is unlikely to surge in January even though severe winter weather is badly hurting farm output, a senior economic official said on Thursday. REUTERS/Patty Chen (CHINA)

Made in China: A slip in manufacturing has given some oil analysts cause for pessimism.

Brent and US oil fell today after manufacturing in China hit a 28-month low, raising concerns that fuel demand at the world's second largest oil importer may slow. The news came as the market watched progress of reserve oil stocks sales by IEA member nations.

Chinese factory output expanded in June at its lowest pace in 28 months, a survey showed, indicating the world's second-largest economy is feeling the pinch of monetary policy tightening and slack global demand.

ICE Brent crude fell 81 cents to $111.67 a barrel after falling nearly $1 earlier. Brent is on track to post its first weekly rise in a month. US crude was at $94.82 a barrel, down 60 cents.

CMC Markets analyst Ben Le Brun said the data hinted at a recurring theme in China.

“Manufacturing continues to slow but it is…

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