The price of oil retreated toward $105 a barrel Monday as traders weighed conflicting signals about the strength of demand: Slowing growth in China and plunging U.S. fuel stockpiles.
By early afternoon in Europe, benchmark crude for August delivery was down 65 cents at $105.30 a barrel in electronic trading on the New York Mercantile Exchange. The contract jumped $1.04 to close at $105.95 in New York on Friday.
Oil is up about 10 percent so far this month. It has been jolted higher by unexpectedly sharp drops in U.S. crude and gasoline inventories, which suggest stronger demand. The military ouster in early July of Egypt's president has also added a premium to crude, reflecting the risk of supply disruption from political instability in a country that controls the Suez Canal.
Those factors were tempered Monday by a second straight quarter of slowing economic growth in China. The world's No. 2 economy expanded 7.5 percent in the April-June quarter after 7.7 percent growth in the previous quarter.
While some analysts had expected an even sharper slowdown, it still was China's weakest growth rate since 1991 and will signal a decrease in its need for crude and other fuels.
Brent crude was down 71 cents at $108.10 a barrel on the ICE Futures exchange in London.
In other energy futures trading on Nymex:
- Wholesale gasoline lost 2.59 cents to $3.018 a gallon.
- Heating oil slipped 0.99 cent to $3.0209 a gallon.
- Natural gas added 3 cents to $3.674 per 1,000 cubic feet.