Oil prices plunged on Thursday as renewed concerns over global trade clouded the outlook for economic growth and energy demand.

The West Texas Intermediate for September delivery dipped 4.63 US dollars, or 7.9 percent, to settle at 53.95 dollars a barrel on the New York Mercantile Exchange. That was the largest front-month contract percentage decline since Feb. 4, 2015 and the lowest settlement since June 19 of this year, according to Dow Jones Market Data.

The international benchmark Brent Crude for October delivery slid 4.55 dollars, or 6.99 percent, to close at 60.50 dollars a barrel on the London ICE Futures Exchange. It was the sharpest one-day decline in more than three years.

On the US equities market, the S&P 500 energy sector closed down 2.28 percent, among worst-performing groups.

The market movement came after US President Donald Trump tweeted on Tuesday that Washington would put more tariffs on Chinese imports, raising fears of a global economic slowdown.

Meanwhile, a slew of newly-released poor data dented market sentiment even further.

The J.P.Morgan global manufacturing purchasing managers' index (PMI) dropped to 49.3 in July, signaling contraction for the third straight month and falling to its lowest level since October 2012, according to its latest report released on Thursday.

"July PMI data signal that the global manufacturing sector remained on a weak footing at the start of the third quarter. The PMI implies no growth in global manufacturing output with the deteriorating trend in international trade flows weighing particularly heavily on performance," said Olya Borichevska, a researcher at J.P.Morgan.

The report was compiled by IHS Markit based on the results of surveys covering over 13,500 purchasing executives in over 40 major economies.

A separate report released by the Institute for Supply Management showed that US manufacturing PMI came lower-than-expected in July.

The soft data coupled with prolonged trade worries reignited concerns over weakening demand for oil, experts noted.

Oil prices were already under pressure on Thursday as markets participants digested the US Federal Reserve's latest decision on interest rates and Fed Chairman Jerome Powell's remarks.

US Federal Reserve on Wednesday lowered interest rates for the first time since the 2008 global financial crisis, amid rising concerns over trade tensions, a slowing global economy and muted inflation pressures.

The Federal Open Market Committee (FOMC), the Fed's rate-setting body, trimmed the target for the federal funds rate by 25 basis points to a range of 2 percent to 2.25 percent after concluding its two-day policy meeting, in line with market expectation.

"Through the course of the year, weak global growth, trade policy uncertainty, and muted inflation have prompted the FOMC to adjust its assessment of the appropriate path of interest rates," Powell said at a press conference Wednesday afternoon.

Calling it a "mid-cycle adjustment" to the central bank's monetary policy, Powell said the rate cut is "not the beginning of a long series of rate cuts."

"The Fed's interest rate decision is also weighing on oil prices via the firmer US dollar," Commerzbank analyst Carsten Fritsch said in a note.