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Oil recovers after dive on Chinese data

New York’s main contract, West Texas Intermediate light sweet crude for July, edged down three cents to settle at $94.25 per barrel. WTI had hit an intraday low of $92.21.

Brent North Sea crude for delivery in July settled at $102.44 per barrel, down 16 cents from Wednesday.

“Oil prices have continued their recent declines for the third day in a row on both Brent and WTI as economic data continues to point to reduced demand against a backdrop of high inventories,” said CMC Markets analyst Michael Hewson.

HSBC bank reported China’s manufacturing output contracted in May, raising concerns about energy demand in the world’s second-largest economy.

“The market was kind of reeling in the morning with the news” from China, said Rich Illczyszyn of iiTrader.com.

But WTI found “pretty tough resistance” at the $92 level, he said, and pulled back from its lows as traders were looking for buying opportunities after Wednesday’s sharp drop and preparing for the long holiday weekend.

“People don’t want the risk of exposure and going home for the Memorial Day weekend with a big short position,” Illczyszyn said.

US gasoline demand is expected to surge this weekend as the Memorial Day holiday Monday kicks off the summer vacation driving season.