Oil prices dropped on Tuesday amid concerns over weak demand from China, the world’s largest importer, despite ongoing disruptions affecting Libya's oil exports. The combination of sluggish economic data from China and supply issues in Libya has created a challenging environment for global oil markets.

Brent crude futures, the international benchmark, fell by 0.39% to $77.23 per barrel, while West Texas Intermediate (WTI) futures declined by 0.16% to $73.92 per barrel. This decline comes as traders and analysts weigh the impact of slowing demand against persistent supply disruptions in key regions.

China's economic slowdown continues to play a significant role in shaping global oil demand. Recent data revealed weaker-than-expected growth in China’s manufacturing sector, leading to reduced consumption of commodities, including oil. The country’s Purchasing Managers' Index (PMI) for August indicated contraction, with export orders particularly soft. This has raised concerns about the strength of the global economic recovery and its ability to sustain higher oil prices.

"The weak demand outlook from China is putting significant pressure on oil markets. Despite the supply disruptions we've seen in places like Libya, broader market sentiment remains bearish due to ongoing concerns about the pace of economic growth, especially in Asia," said Stephen Brennock, an analyst at PVM Oil Associates.