Oil market slips on profit-taking

World oil prices slipped Thursday as dealers took profits from the previous day's bumper gains that were driven by strong US crude demand. The US benchmark, West Texas Intermediate (WTI) for delivery in July, fell 15 cents to $103.92 a barrel. Brent North Sea crude for July lost 17 cents to stand at $110.38 a barrel just after midday in London. Crude futures had rallied on Wednesday following news of tumbling crude reserves in top consumer the United States. New York crude had jumped to a one-month peak at $104.07, while Brent struck a two-and-a-half-month high at $110.55. 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. Thursday'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.