VIENNA, Austria — Mounting evidence of a U.S. recession and waning Chinese demand sent crude oil prices drifting today below the previous day's closing.

Monday's rally in oil futures proved short-lived after U.S. manufacturers reported lethargic activity numbers for October. The Institute for Supply Management said its manufacturing index fell to 38.9, the worst reading in more than a quarter century. Any reading below 50 signals contraction.

Light, sweet crude for December delivery slid 31 cents to $63.60 a barrel in electronic trading on the New York Mercantile Exchange by noon in Europe. After rising above $69 per barrel Monday, light, sweet crude for December delivery tumbled $3.87 to settle at $63.91 overnight.

The manufacturing data along with weak U.S. auto sales "poured cold water" on the oil market, said Victor Shum, energy analyst at consultancy Purvin & Gertz in Singapore.

"The overriding concern is the economy in the U.S.," Shum said. "For 2008 there is unlikely to be any demand growth for oil and in 2009 there may be some modest growth but much less than we would have seen otherwise."

Adding to the gloomy outlook for the oil market, Credit Suisse cut its forecast for growth in China's oil demand next year to nearly zero from 4 percent on the back of lower economic growth forecasts.

"The latest set of economic data out of China suggests a much more severe economic slowdown is under way there. Hopes of even a slightly decoupled China in 2009 are fading fast," the investment bank said in a report.