SINGAPORE: Brent futures slipped towards $103 a barrel on Thursday as a sharper-than-expected drop in US factory output muddied the outlook for demand, but a surprise drawdown in crude stockpiles in the world's top consumer helped stem the slide.
US factory output dropped in April and manufacturing activity in New York state contracted this month as a recession in the euro zone and slower growth in China undercut demand for exports from the world's biggest economy.
The uncertain global outlook at a time when supplies are rising weighed on oil, making it difficult for prices to move much higher from current levels.
Brent slipped 32 cents to $103.36 a barrel by 0651 GMT, after settling up $1.08 -- the biggest rise in dollar terms since May. 6. US oil fell 53 cents to $93.77, after ending 9 cents higher.
"The economy doesn't support prices at these levels so why should they be there?" said Jonathan Barratt, chief executive of BarrattBulletin, a Sydney-based commodity research firm. "The rise in oil we saw yesterday was because of the surprise draw in US crude stockpiles. It caught some people short."
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