Mubasher: Oil prices dropped on Tuesday amid signs that an economic slowdown in China would spread, as worries mounted over the future fuel demand.

The sombre economic news dragged on financial markets across Asia, including crude futures.

By 8:42 am GMT, US Nymex crude futures fell 0.78% to $53.38 per barrel (pb), while international benchmark Brent futures dropped 0.88% to $62.19 pb.

State planner in China, the world’s second largest economy and oil consumer, on Tuesday warned that the country’s job market would be impacted by the downward pressure on the economy as declining manufacturing orders herald a further drop in activity and more job losses in the months ahead.

China on Monday posted its lowest annual economic growth since 1990.

“Slowing manufacturing activity in China is likely weighing on demand,” Singapore-based tanker brokerage Eastport told Thomson Reuters, adding that industrial slowdowns tended to be key indicators that fed gradually into lower demand for oil shipments.

In a sign that an economic slowdown is spreading, South Korea’s export-oriented economic growth lost pace, touching a six-year low of 2.7% last year, official data showed on Tuesday.

In the same vein, the International Monetary Fund (IMF) on Monday slashed its global growth projection for this year to 3.5%, down from 3.7% previously predicted last October.

“This was the second downturn revision in three months, and we can still see further downgrades in near future if trade tensions escalate, the UK exits with a no-deal from the EU, or China’s economic growth drops more sharply,” futures brokerage FXTM chief market strategist Hussein Sayed told Reuters.

Despite the gloomy outlook, oil prices had some support from supply curbs which started late last year by the Organization of Petroleum Exporting Countries (OPEC).