Oil down despite China stimulus, supply drop

LONDON - The price of oil drifted lower Thursday even after China introduced measures to underpin growth and U.S. crude inventories unexpectedly declined.

Benchmark U.S. crude for May delivery was down 53 cents to $99.09 a barrel at 0900 GMT in electronic trading on the New York Mercantile Exchange. The contract shed 12 cents to close at $99.62 on Wednesday.

Brent crude, used to set prices for international varieties of oil, was down 13 cents to $104.66 a barrel on the ICE exchange in London.

China's announcement that it would give bigger tax breaks to small businesses, build social housing and accelerate railway construction is yet to dispel concerns about China's growth momentum. With signs that China's manufacturing has weakened, investors had expected Beijing to unveil stimulus measures.

The U.S. Energy Department said Wednesday the nation's crude oil supply dropped by 2.4 million barrels last week, contrary to the expectations of analysts that the supply increased. It was the first decline in 11 weeks.

In other energy futures trading in New York.

- Wholesale gasoline was down 0.48 cents at $2.862 a gallon.

- Natural gas dropped 4 cents to $4.324 per 1,000 cubic feet.

- Heating oil was down 0.7 cents to $2.859 a gallon.