LONDON/TOKYO – Oil prices dropped Tuesday after rising earlier in the day, as traders focused on disappointing European manufacturing data and news of record-high eurozone unemployment, analysts said. Brent North Sea crude for delivery in May fell 35 cents to stand at $110.73 a barrel in late London deals and after rising by about 30 cents in morning trade. New York's main contract, West Texas Intermediate (WTI) light sweet crude for May, slipped 64 cents to $96.43 a barrel. "Manufacturing PMIs from several European countries including Italy, Spain and the UK all came in weaker than expected today," said Fawad Razaqzada, an analyst at trading group GFT Markets. "This followed a disappointing US ISM Manufacturing PMI we saw yesterday, which pointed to weaker a demand outlook from the world's largest consumer of oil." Eurozone unemployment ran at a record 12 percent in February, official data showed Tuesday, with more than 19 million people on the dole. The figures and a weak manufacturing sector report added to the gloom after data earlier this year had encouraged some hope the European economy might finally have touched bottom. "Such unacceptably high levels of unemployment are a tragedy for Europe," said a spokeswoman for EU Employment Commissioner Laszlo Andor. Manufacturing data meanwhile showed the slump deepening sharply as even Germany was dragged down. The Markit Eurozone Manufacturing Purchasing Managers Index fell to 46.8 points in March, up from an initial estimate of 46.6 but well short of the already weak 47.9 posted in February. Markets were also closely tracking developments in Cyprus, where Finance Minister Michalis Sarris resigned Tuesday, hours after a judicial probe was launched into how the eurozone member was pushed to the verge of bankruptcy before having to agree a crippling bailout. The price of oil followed stock markets lower Tuesday as US manufacturing growth eased. Benchmark oil for May delivery was down 33 cents to $96.74 per barrel at midday Bangkok time in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents to close at $97.07 a barrel Monday. Monday's drop, which was the first since March 21, came as Exxon shut a pipeline that carries oil out of the US Midwest. Oil prices were also hurt by a report showing weaker-than-expected manufacturing growth in the US. The Institute for Supply Management said Monday that its index of factory activity slipped to 51.3 percent in March from 54.2 percent in February. A reading above 50 indicates expansion. The report contributed to drops in Asian stock markets, providing a negative cue for oil market trading. Analysts at DBS Bank Ltd. in Singapore said the manufacturing figure was a reminder that "growth remains subpar" in the world's largest economy, an engine being counted on to help drive the global economic recovery. – Agencies
