Singapore: Oil prices edged higher in Asian trade on Tuesday on easing concerns about a sharp economic slowdown in China, the world's biggest energy user, analysts said.

However, economic and political uncertainty in Europe capped prices and a weaker euro was helping dampen demand for dollar-priced crude.

Oil prices had slipped on Mondya following an HSBC purchasing managers' index showing China's manufacturing activity contracted for a sixth straight month in April.

Analysts, however, said there was a silver lining in the data that indicated recovering demand in the world's second-largest economy.

The PMI reading was 49.1 in April, up from 48.3 in March, denoting an improvement but no return to expansion just yet. A reading below 50 indicates contraction while anything above 50 shows growth.

"The Chinese PMI data is a case of whether you look at the glass as half-full or half empty," said Victor Shum, senior principal at Purvin and Gertz international energy consultants in Singapore.

"Some traders and investors are seeing this as a buy opportunity. There is optimism about the Chinese economy because the HSBC PMI actually showed improvement in output, and that has pushed oil prices up."

Political and economic uncertainty in Europe remained a bearish factor, analysts said.

Spain -- one of the euro zone's beleaguered economies -- yesterday said that it had plunged back into recession in the first quarter of 2012.