Oil prices mixed after gloomy European data

(AFP/Philippe Huguen)

NEW YORK: US oil prices eked out a gain on Tuesday despite weak European economic indicators and concerns that a pipeline spill in Arkansas could cause excess US oil supplies to mount.

US benchmark West Texas Intermediate for May delivery settled in New York at $97.19 a barrel, up 12 cents.

The European oil benchmark, Brent crude for May, settled at $110.69 a barrel, down 39 cents.

The latest batch of weak European economic data weighed on markets, analysts said.

Eurozone unemployment ran at a record 12 per cent in February, official data showed on Tuesday, with more than 19 million people out of work.

Eurozone manufacturing activity continued to contract. The Markit Eurozone Manufacturing Purchasing Managers Index fell to 46.8 points in March, well short of the already weak 47.9 posted in February.

The ISM manufacturing index released Monday fell to 51.3 in March from 54.2 in February, showing slower growth in the sector. On the positive side, the Department of Commerce on Tuesday reported that new orders for manufactured goods rose in February by 3.0 per cent.

"There's a little bit of negativity. Not a lot, but a little bit," said Dominick Chirichella, oil analyst at the Energy Institute.

Markets are also eyeing news about the Pegasus pipeline, a 95,000 barrel-a-day line that has been down since an oil spill last Friday. The outage is expected to lead to increasing oil inventories at US oil hubs, such as Cushing, Oklahoma.

Pegasus "is probably going to stay down for more than a couple of days," Chirichella predicted.

Andy Lebow, senior vice president of energy futures at Jefferies Bache, said the recent levelling off of oil prices was not surprising given the rally of recent weeks.

"Crude inventories are high. But in the big picture, the market is range-bound and not really going anywhere," Lebow said.