Brent crude oil prices fell over $1 per barrel and below $60 for the first time since July 2009 in early European trading on Tuesday as Chinese factory activity slowed and stumbling emerging market currencies dented demand expectations.

Oil futures have almost halved since June amid rising output and cooling demand, but producer club OPEC has so far resisted calls to cut production to shore up prices. Data showing activity in China’s factory sector shrank for the first time in seven months in December, adding to a slew of reports showing more fatigue in the world’s No.2 economy, further dragged on oil prices.

“China leaves 2014 on a weak note (and) the calls for further monetary stimulus are getting louder,” Singapore-based Phillip Futures said on Tuesday.

Brent for January delivery was at $59.75 a barrel at 0750 GMT, down $1.31 and to its lowest level since 2009. US crude for January delivery was at $54.85 a barrel, down $1.06 a barrel.

“The oil market is experiencing a cost re-basement which makes determining when the market is oversold extremely difficult,” US bank Goldman Sachs said. “For the market to be oversold, it requires prices to be far below costs, (which) are falling nearly as fast as the price, which means oil producers can spend less to get the same or potentially even more in terms of production,” it added.

Analysts said weakening emerging market economies and their currencies were also weighing on oil prices.

In Russia, the central bank hiked its key interest rate by 6.5 percentage points to 17 per cent on Tuesday in an attempt to halt a collapse in the rouble. In India, the Reserve Bank has been intervening in support of the struggling rupee in recent sessions, triggered by a worsening trade deficit, and in Indonesia the rupiah dropped to its lowest value in 16 years against the US dollar amid spiking emerging market volatility.

“The sharp decline in nearly all commodity prices and the weakening in commodity currencies creates headwinds for oil demand in the commodity producing emerging markets in Latin America and the Middle East. Historically these regions didn’t contribute much to oil demand, today they do,” Goldman Sachs said.