Oil prices dragged down by economic headwinds

BANGKOK – Oil prices zigzagged Wednesday, giving up early gains that came on the heels of a report showing U.S. vehicle sales rising sharply last month.

Benchmark crude for October delivery was down 38 cents in late afternoon Bangkok time to $94.92 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell $1.17 to close at $95.30 per barrel on the Nymex on Tuesday.

Brent crude rose 3 cents to $114.21 on the ICE Futures exchange in London.

Energy market sentiment was lifted in early trading by report showing U.S. new car and truck sales rose 20 percent in August to 1.3 million vehicles — a sign that gasoline consumption could be on the upswing in the world's No. 1 economy. Big pickup sales drove the increase, the Autodata Corp. report said.

But signs that manufacturing around the globe is weakening, which suggests a drop in fuel demand, weighed on oil prices.

U.S. factory activity shrank for a third straight month in August, according to a survey by the Institute for Supply Management released Tuesday.

It's also contracting in just about every other major economy, including the 17 countries that use the euro, Britain, China, Japan and Brazil. In China, factory activity fell last month to its lowest level in more than three years.

In other futures trading in New York, natural gas rose 1 cent to $2.86 per thousand cubic feet.

Wholesale gasoline rose marginally to nearly $2.96 per gallon. Heating oil fell less than 1 cent to $3.14 per gallon.