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Oil prices mixed on Ukraine, China developments

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(Globalpost/GlobalPost)

Oil prices diverged on Tuesday as traders reacted to tensions over the Ukraine-Russia crisis and weak manufacturing figures from China.

The US benchmark, West Texas Intermediate for delivery in June, climbed 60 cents to $100.08 a barrel.

Brent North Sea crude for June fell 35 cents to stand at $107.37 a barrel in late London deals.

Russia on Tuesday rejected a new peace initiative for Ukraine as fears of open war mounted over the ex-Soviet republic, whose troops are waging an increasingly deadly offensive against pro-Moscow rebels.

"Chaos and the risk of civil war" are looming, French President Francois Hollande warned after Kiev announced the death toll from an assault on a rebel-held flashpoint town in the east had climbed over 34.

Ukraine is a major conduit for Russian oil and gas exports to Western Europe, and any escalation of the conflict could disrupt supplies and send prices soaring, analysts have warned.

Singapore's United Overseas Bank (UOB) meanwhile said that some of the price support was eroded by a survey that showed China's manufacturing sector contracted for a fourth consecutive month in April and at a faster pace than initially thought.

British banking giant HSBC on Monday said that its purchasing managers' index (PMI) for China last month came in at 48.1, a tad up from the 48.0 in March but weaker than the 48.3 reported in its preliminary report on April 23.

A figure below 50 indicates contraction, while anything above points to growth.

"Oil was pressured by the Chinese PMI report, adding to worries that the Chinese economy is still losing momentum," UOB said in a market commentary.

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http://www.globalpost.com/dispatch/news/afp/131003/italian-service-sector-grows-again-after-letta-win