May 5 (Bloomberg) -- Brent crude fell as market concern over weak demand in China and high stockpiles in the U.S., the two biggest energy consumers, outweighed investor worries that fighting in the Ukraine may disrupt European energy supplies. West Texas Intermediate trimmed gains in New York.
Futures rose as much as 0.3 percent in earlier trading after gaining on May 2 as Ukraine sent armored vehicles and artillery to retake the town of Slovyansk, a stronghold for pro- separatist forces. A final reading of the China Purchasing Managers’ Index from HSBC Holdings Plc and Markit Economics was 48.1 for April, a fourth monthly contraction that missed the median estimate of 48.4 in a Bloomberg News survey of economists.
“U.S. inventories are at highs, and disappointing data from China is adding concern over whether demand is really there,” Ole Hansen, the head of commodity strategy at Saxo Bank A/S in Copenhagen, said today by phone. “That’s bringing the price back down, and the market is really struggling to do anything at the moment. It will take quite a bit more for a lasting rise in the market, given everything else that’s going on.”
Brent for June settlement fell as much as 40 cents, or 0.4 percent, and was at $108.32 a barrel on the London-based ICE Futures Europe exchange at 1:04 p.m. local time. The contract climbed 86 cents to $108.98 on April 29. U.K. offices are closed today for a May Day holiday.
WTI for June delivery was up 18 cents, or 0.2 percent, at $99.94 a barrel in electronic trading on the New York Mercantile Exchange, after rising as much 68 cents. The U.S. benchmark crude was at a discount of $8.35 to Brent. The spread narrowed for the first day in five after closing on May 2 at $8.83.