By Eric Yep 
 

Crude-oil futures were steady in Asian trading hours Thursday supported by a larger-than-expected drop in U.S. oil stocks and positive China manufacturing data.

On the New York Mercantile Exchange light, sweet crude futures for delivery in September traded at $103.10 a barrel at 0530 GMT--down $0.02 in the Globex electronic session. September Brent crude on London's ICE Futures exchange rose $0.17 to $108.20 a barrel.

Oil gained overnight after U.S. crude-oil stocks fell by almost 4 million barrels in the week ended July 18--much more than market expectations for a fall of 2.5 million barrels and indicating strong demand.

"In the short term we expect U.S. crude runs to hold steady at peak summer levels. However, if refining margins continue to fall, fast run cuts cannot be ruled out," Societe Generale said in a report.

The HSBC China preliminary manufacturing Purchasing Managers' Index rose to 52 in July from 50.7 a month earlier representing an 18-month high and indicating stronger growth in China--bullish for oil demand.

Meanwhile, the U.S. said the downing of Ukrainian military jets on Wednesday illustrates Moscow's support for pro-Russia separatists in Ukraine. The European Union is also expected to present options for broader sanctions against Russia later Thursday.

However, sanctions against Russia's state-run oil company Gazprom--which holds the monopoly on exporting pipeline gas--aren't in the EU's interest, Societe Generale said. "Gazprom provides 26% of the gas consumed at [the] European level. It is simply not possible, on short- or medium-term notice, to replace those volumes," Societe Generale analyst Dr. Thierry Bros said.

Nymex reformulated gasoline blendstock for August--the benchmark gasoline contract--rose 83 points to $2.8684 a gallon while August heating oil traded at $2.8810--56 points higher.

ICE gasoil for August changed hands at $888.75 a metric ton--up $1.50 from Wednesday's settlement.

Write to Eric Yep at eric.yep@wsj.com