Oil near $103 amid mixed China manufacturing signs

Oil prices fell to near $103 a barrel Monday in Asia after a report showed Chinese manufacturing may have improved this month but remains weak.

Benchmark oil for June delivery was down 63 cents to $103.25 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract rose $1.16 to settle at $103.88 in New York on Friday.

Brent crude for June delivery was down 56 cents at $118.20 per barrel in London.

HSBC said Monday that its preliminary Purchasing Managers Index rose to 49.1 in April from 48.3 in March, suggesting a slowdown of Chinese growth may have bottomed out in the first quarter.

While the index rose, it still showed a second month of contraction because a reading below 50 indicates a drop in industrial production, HSBC said. The government's official PMI, which measures more state-owned companies than the HSBC index, rose to an 11-month high of 53.1 in March.

Crude has slid from $110 last month amid investor worries that economic growth in the U.S. and China, the world's two largest oil consumers, may slow more than previously expected.

"The re-emergence of China and U.S. growth concerns, plus worries over Spanish sovereign debt, are undermining commodity prices," Barclays Capital said in a report. However, oil prices won't likely fall much "unless there is a major negative macro shock in the form of a deterioration in Europe or evidence of a hard landing in China, neither of which we think likely."

Investors this week will also be closely watching the latest data from the U.S. about housing prices and consumer confidence for clues about the strength of the economy and crude demand. The Federal Reserve is scheduled to meet Tuesday and Wednesday to discuss the economy and monetary policy.

In other energy trading, heating oil was down 1.6 cents at $3.12 per gallon and gasoline futures fell 1.0 cent at $3.10 per gallon. Natural gas rose 1.3 cents at $1.94 per 1,000 cubic feet.