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(Bloomberg) -- Oil prices slid as concerns over short-term demand, including weaker-than-expected Chinese manufacturing data, outweighed expectations for tight supply later in the year.

West Texas Intermediate fell 0.5% toward $75 a barrel after a 1.5% drop on Monday. China’s export-tilted manufacturing sector missed estimates in April in a possible indication of recession in buyer markets such as the US and Europe. 

“It’s going to take some evidence in the physical market on the tightening we see in our balances before we see any more positive or committed trading activity,” Emily Ashford, an energy analyst at Standard Chartered Bank, said by phone. Weak crack spreads and refinery margins for spot oil products are also flagging potential softer demand for crude, she said.

Still, the bank sees oil’s supply and demand balance shifting from surplus in April to a 1.3 million barrel-a-day deficit in June, with Chinese usage expected to grow and production cuts taking units out of the market.

Oil has shed more than 5% this year and losses have been spurred by a darkening economic outlook, with central banks including the Federal Reserve continuing to raise rates. The Fed is expected to deliver another hike this week, potentially the last increase in the current cycle.

On the supply side, however, OPEC is set to start output cuts from this week. With refineries returning from maintenance to meet seasonal summer usage, analysts are weighing whether this will combine with rising demand to boost prices.

“The question is do we still have this shortage of aggregate supply, we could easily see this creep up this summer and again stoke prices,” Rystad Energy analyst Louise Dickson said on Bloomberg TV earlier Tuesday.

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