Oil prices eased in Asia on Tuesday as data showing weak Chinese manufacturing activity fuelled concerns over demand in the world’s second-largest economy, analysts said.

New York’s main contract, light sweet crude for delivery in June dropped 43 cents to USD 88.76 a barrel on its first day of trade, while Brent North Sea crude for June shed 34 cents to USD 100.05 in mid-morning trade.

“Chinese growth is definitely slower and people are pricing that in,” Kelly Teoh, market strategist at IG Markets in Singapore, told.

Banking giant HSBC said that according to preliminary data manufacturing activity in China slowed in April due to sluggish foreign demand.

Its initial purchasing managers’ index (PMI) for the month came in at 50.5, from a final 51.6 in March. A reading above 50 indicates growth and anything below points to contraction.

The final result will be announced on May 2. “New export orders contracted after a temporary rebound in March, suggesting external demand … remains weak,” Qu Hongbin, a Hong Kong-based economist with HSBC, said in a release.

The result comes just over a week after official data showed the economy grew 7.7 per cent in the January-March quarter, slower than the 7.9 per cent in the previous three months and below the 8.0 forecast.

“Traders are reading the Chinese PMI data in line with last week’s GDP (gross domestic product) figures, giving oil some pressure on the downside,” David Lennox, resource analyst at Fat Prophets in Sydney, told.

“There are also concerns over oil demand, as strong growth in China was expected to offset a weaker demand in the United States and Europe.” China is the world’s biggest energy-consuming nation and the health of its economy is closely watched by oil traders.