Oil Declines From Two-Week High as China Manufacturing Contracts

Oil dropped from the highest closing price in almost two weeks as manufacturing unexpectedly contracted in China and crude production resumed in the Gulf of Mexico after Hurricane Isaac.

Futures fell as much as 0.5 percent in New York after the biggest monthly gain since October. China’s Purchasing Managers Index shrank for the first time in nine months in August, a government survey showed Sept. 1. A separate measure by HSBC Holdings Plc and Markit Economics today showed the fastest contraction since March 2009. China is the world’s second biggest oil user. About 72 percent of daily crude output in the Gulf of Mexico is shut, from as much as 95 percent last week, the U.S. Bureau of Safety and Environmental Enforcement said.