Crude prices lower in New York trade

The price of crude oil was slightly lower in early afternoon trade in New York as demand concerns and BP’s (LSE: BP) inability to cap a leaking oil well in the Gulf of Mexico outweighed relatively good news on US manufacturing.

The Institute of Supply Management said its manufacturing index was at 59.7 in May, better than analysts had expected but still lower than the reading of 60.4 in April, indicating that while manufacturing activity is still in expansion, it fell slightly from April’s level.

The concern about demand came as a purchasing managers’ index in China fell from 55.7 in April to 53.9 in May, raising the possibility that China’s economy is cooling off and will not require as much oil as had been anticipated, as well as on concerns that banks in the Eurozone will have to write down more debt, exacerbating economic woes there.

July contracts for West Texas Intermediate crude were down $1.09 to $73.35 per barrel at just past 1 p.m. on the New York Mercantile Exchange, while at last report Brent crude was 88 cents lower to $73.70 per barrel on the ICE Futures Europe exchange in London.

Nymex July gasoline futures were 2 cents lower to $2 per gallon in early afternoon trade in New York, while July heating oil futures also traded at $2 per gallon, down 1 cents, and July natural gas had dropped 10 cents to $4.27 per million British thermal units.

The retail price of a gallon of gasoline was down half a cent overnight, to $2,727 per gallon on average nationally, placing the average price of regular unleaded gasoline 5.5 cents below where it was last week, although gasoline remains 21.5 cents higher than it was a year ago.