World oil prices slipped today as dealers took profits from the previous day's bumper gains that were driven by strong US crude demand.
The market was pushed lower as markets also tracked mixed US economic data, including a surprisingly large rise in weekly jobless claims.
Brent North Sea crude for July lost 12 cents to stand at USD 110.43 a barrel in late afternoon deals in London.
The US benchmark, West Texas Intermediate (WTI) for delivery in July, fell 22 cents to USD 103.85 per barrel.
Crude futures had rallied yesterday following news of tumbling crude reserves in top consumer the United States.
New York crude jumped to a one-month peak at USD 104.07, while Brent struck a two-and-a-half-month high at USD 110.55.
"Oil prices were driven by the release of the weekly statistics on US oil inventories," noted PVM oil analyst Tamas Varga.
The US Department of Energy said stockpiles plunged 7.2 million barrels in the week ending May 16, confounding traders who expected a gain of 700,000.
Today's price losses were meanwhile capped by signs of a recovery in China's manufacturing sector.
Banking giant HSBC said preliminary data from its purchasing managers index (PMI) showed activity in China's factories shrinking at a much slower pace in May than April.
The banking giant's PMI improved to 49.7 from 48.1 last month.
While the figure is below the 50-mark that suggests contraction, it is the second straight month of improvement and will fuel hopes the world's number two economy is picking up after months of slowing.
