LONDON, Jan 30 (Reuters): Oil prices edged lower on Tuesday, extending a more than 1 per cent drop in the previous session on China's economic outlook, though losses were kept in check by supply fears driven escalating tensions in the Middle East.
March Brent crude futures, which are due to expire on Wednesday, fell 52 cents, or 0.6 per cent, to $81.88 a barrel by 1413 GMT. The more active April contract was down 50 cents, or 0.6 per cent, at $81.33. US West Texas Intermediate crude lost 29 cents, or 0.4 per cent, to $76.49.
Both contracts fell by more than $1 on Monday as a deepening real estate crisis in China fuelled concerns over demand in the world's biggest crude consumer, with a Hong Kong court ordering the liquidation of property company China Evergrande Group.
"(The) ramifications of a possible collapse in China's property sector makes moot any authority stimulus and will have very negative global shockwaves," said PVM analyst John Evans.
Continuing conflict in the Middle East, however, prevented further losses.
Washington vowed to take "all necessary actions" to defend its troops after a deadly drone attack in Jordan by Iran-backed militants, the first U.S. military deaths since the Israel-Gaza war began, putting markets on edge.
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