Oil dropped as German manufacturing output unexpectedly contracted in March

Oil dropped as German manufacturing output unexpectedly contracted in March, signaling the euro-zone debt crisis is slowing growth in the region’s biggest economy.

Futures fell as much as 1 percent after a purchasing managers’ index for Germany’s manufacturing slipped to 48.9 this month. The median forecast by economists called for a reading of 50.5, according to a survey.

Total euro-area services and manufacturing output slipped more than economists estimated in March. A composite index based on a survey of purchasing managers in both industries fell to 46.5 from 47.9 in February, London-based Markit Economics said today. Economists had forecast a reading of 48.2, according to the median of 23 estimates in a survey.

Cypriot President Nicos Anastasiades is trying to forge an agreement on how to stave off financial collapse. The island country’s government may propose a revamped bank-deposit levy to raise 5.8 billion euros ($7.5 billion) after lawmakers rejected a previous measure, a Cypriot official said.

The European Central Bank said today it may cut Cypriot banks off from emergency funds after March 25 as the country’s president worked on a new plan to obtain a European bailout.

Crude oil for May delivery declined to $92.54 a barrel on the New York Mercantile Exchange.

Brent oil for May settlement fell 55 cents, or 0.5 percent, to $108.17 a barrel on the London-based ICE Futures Europe exchange.