Do you think i should cut off contact with him?

I have been talking to this guy for about a month now and we get on very well. I wasn't really looking for this to happen as i have just separated from someone, but i run a meetup group that he joined. We got talking and spoke for a few weeks but he was away for a business trip. We got very carried away with our contact and we started to speak on the phone daily also. I think i put him on a bit of a pedestal. We appeared to have all the same interests and views on everything, we laughed about all the same things, and it just felt very natural and comfortable. After he got back into town i felt things changed a bit. His flirting died down a lot, but every once in a while he would still say things that made me think he was interested. We still spoke daily and we had said from the very beginning that when he was back in town we should meet up. He contacted me one particular day and suggested meeting for dinner, which we did. I felt in person extremely shy and nervous. I think it was because i had put such high expectations on it and was so worried he wouldn't like me. Conversation between us was okay and after the meal we went back to his apartment and hung out for 4 hours. During this time we cuddled and he asked me if i felt he treated me nicer than my ex as he knows a lot of how my ex treated me. I thought this was a good sign and showed interest on his part in wanting me to feel treated nicely by him. Nothing else happened between us and after the date i went home. We still continued daily after that to talk which of course still gave me hope, and then one day he came out and told me he just wanted to be friends. He told me that he finds me incredibly attractive (which i do believe because he tells me this all the time), but he did not feel a spark between us on the date. I thought it was a bit of a snap decision because it was the first date, and i wanted us to spend more time together and go on more dates because i feel like people are always a bit nervous on the first date, and then after meeting once relax a bit, but i told him that for whatever reason i guess he had made his mind up and i couldn't change it so fair enough. He said he really likes me as a person and wants to be friends and hang out still. We have still continued to talk daily, and the other day he proceeded to tell me all about this girl back in his hometown who he really likes but she is with someone. He said that if she was willing to leave her boyfriend, he would go back to his hometown in a heartbeat to be with her. I felt this was a bit of a smack in the face seems i like him, and after him telling me about it i had to take a bit of time because i didn't want to go back and say something i regretted or get annoyed about it. I told him that i really hope that they end up together if that is who he wants because he is a lovely guy and i would like to see him happy, but it was a bit inconsiderate to my feelings to which he said he was very sorry and has a big mouth and didn't think and shouldn't have said it. I then said to him it is good though that he told me because it helps me get over liking him knowing that he likes another girl so much and would make me wary of pursuing anything with him, to which he seemed to not like me saying too much. I said to him what does it matter to you if you see no potential with me to which he said "I guess it doesn't, i see potential but i don't think we are going to act on it because it isn't enough for me." So we do get on very well and i do want to be friends, but i don't like how he sends mixed messages at times as i feel he is messing with my emotions a bit. It is pretty obvious he does not want to pursue me in a romantic way, so i am not sure why he continues to talk to me daily. As of now we talk via fb messenger daily and i have not sent him a message today and he hasn't contacted me either. I figured if he really wants to be friends with me he will reach out to me and make plans. Do you think i am playing this the right way? I guess he was honest about not wanting more than friendship, but he can be a bit up and down with things and it really irritates me. It is also very hard for me to not reach out to him right now. I can't help but wonder if i am just someone to talk to and an ego boost for him. I know he doesn't want a relationship, but i am not sure if i should cut off contact or just stay friends?