Oil falls toward $96 ahead of US factory data

Oil prices fall toward $96 ahead of release of May US industrial production

Associated Press

BANGKOK (AP) -- Oil prices fell slightly Friday as traders awaited the release of industrial production data from the U.S. later in the day.

Benchmark oil for July delivery fell 10 cents to $96.59 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract gained 81 cents to close at $96.69 a barrel on the Nymex on Thursday.

Later Friday, the U.S. Federal Reserve will release industrial production data for May. Overall industrial production, which also includes output at utilities and mines, dropped 0.5 percent in April. That's the biggest decline since August. Analysts expect to see a slight improvement of 0.2 percent for May.

The world's biggest economy grew at an annual rate of 2.5 percent in the January-March quarter, buoyed by the fastest rise in consumer spending in more than two years. But economic growth is expected to weaken in the second quarter.

Rising Asian stocks helped limit losses in energy markets. A day after plunging more than 6 percent and into bear territory, Japan's Nikkei 225 index, the regional heavyweight, rose 3.6 percent by midday in Tokyo. Mainland China's Shanghai Composite Index climbed off a six-month low. Benchmarks in the Philippines and Indonesia rose by more than 3 percent.

Data showing a better jobs picture and an increase in retail sales in the U.S. helped boost oil prices Thursday. Traders were able to set aside concerns about the economy of the eurozone, which the World Bank says will shrink by 0.6 percent this year. Its previous forecast was for a 0.1 percent contraction.

Oil prices "had been broadly lower on the World Bank growth downgrade but were pulled off their worst levels by the afternoon US data," said Michael Hewson of CMC Markets.

Brent crude, a benchmark for many international oil varieties, fell 21 cents to $104.74 a barrel on the ICE Futures exchange in London.

In other energy futures trading on the Nymex:

— Wholesale gasoline fell 0.1 cent to $2.8601 a gallon.

— Heating oil fell 0.6 cent to $2.9339 per gallon.

— Natural gas fell 0.4 cent to $3.810 per 1,000 cubic feet.

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