SINGAPORE: Oil prices fell in Asian trade on Tuesday as data showing weak manufacturing activity in China suggested growth in the world's second largest economy was slowing. A rebound in the US currency which fell Monday following a poor US manufacturing report also weighed on prices as it makes dollar-priced oil more expensive, denting demand. New York's main contract, light sweet crude for delivery in July dropped 41 cents to $93.04 a barrel and Brent North Sea crude for July delivery shed 26 cents to $101.80. "Economic results out of China are putting downward pressure on prices," Victor Shum, managing director at IHS Purvin and Gertz in Singapore, told AFP. "China's economy is probably cooling, and this has sparked concerns about demand." Global banking giant HSBC said Monday its reading of China's manufacturing activity shrank more than first reported in May, confirming the first contraction in seven months. HSBC's final purchasing managers' index (PMI) reading for May came in at 49.2, the lowest for eight months and worse than the preliminary 49.6 announced on May 23. A reading below 50 indicates contraction in the sector. Growth in China, which is expected to offset dampening economic results in European countries, is closely watched by the market as it affects global oil prices. Desmond Chua, market analyst at CMC Markets in Singapore, said the weaker Chinese manufacturing highlighted "concerns that small- and medium-size enterprises were suffering from a volatile export market". The softer China numbers coincided with data showing that US manufacturing activity also contracted slightly in May, continuing a slowdown tied both to slower government spending and weaker growth abroad. The Institute for Supply Management purchasing managers' index for May fell to 49.0, one point below the line between growth and contraction, compared with a positive 50.7 in April. The slowdown comes amid record-high crude inventories in the United States which puts downward pressure on prices.

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