Oil prices fell on Tuesday as concerns about demand grew due to a halt in Libyan exports and slowing economic growth in China, the world's largest importer of crude oil.
Brent crude futures fell 37 cents, or 0.5%, to $77.15 a barrel, according to Reuters.
U.S. West Texas Intermediate crude, which did not settle on Monday due to the U.S. Labor Day holiday, was up 28 cents from Friday's close at $73.55.
Oil remains under pressure amid ongoing concerns over Chinese demand. The weaker-than-expected PMI data could not have helped ease those concerns, said Warren Patterson, market analyst.
China's purchasing managers' index hit a six-month low in August, and on Monday China reported its first decline in new export orders in eight months in July, and said new home prices grew at their weakest pace this year in August.
“It is clear that these demand tensions are offsetting the impact of supply disruptions from Libya,” Patterson said.
In Libya, oil exports from major ports were halted on Monday, and production was cut across the country, as rival political factions continue to battle over control of the central bank and oil revenues.
The country's National Oil Corporation declared force majeure on the El Feel oil field as of September 2.
Total production fell to just over 591,000 barrels per day as of Aug. 28 from about 959,000 barrels per day on Aug. 26, the corporation said.
In the same context, she explained that production reached about 1.28 million barrels per day on July 20.
However, some supply is set to return to the market, and with eight OPEC+ members raising output by 180,000 barrels per day in October, the plan is likely to go ahead regardless of demand concerns, according to industry sources.
OPEC oil output last month fell to its lowest level since January, a Reuters survey found on Monday.
