(Refiled as UPDATE 5, not 4)
* China crude imports down 3.2 percent on year
* U.S. may renew economic stimulus efforts, prop up growth
* Coming up: U.S. API crude, gasoline stocks; 2030 GMT
* For a technical view, click: []
(Updates throughout)
By Barbara Lewis
LONDON, Aug 10 (Reuters) - Oil dropped more than a dollar
below $80 a barrel on Tuesday, sapped by hints of weaker demand
for fuel in the world's top energy users and a strengthening
U.S. dollar.
U.S. crude <CLc1> for September delivery fell $1.80 to
$79.68 a barrel by 1304 GMT, off a session low of $79.55. London
Brent crude <LCOc1> was down $1.90 at $79.09.
Oil last week hit a high of $82.97, the strongest since May,
but traders had predicted prices would soften because of
oversupply in the market.
"It's fighting shy of wanting to go higher," said one
trader, who could not be named. "If the dollar strengthens, it
will weaken. If the dollar weakens, it will rise."
The dollar, which has been in decline since around May,
edged higher against a basket of currencies on Tuesday. <.DXY>
But any strength could be short-lived.
Speculation has mounted the U.S. Federal Reserve, which
meets after the European business day on Tuesday, could signal a
willingness to print more money to try to support growth and
also renew its promise to keep rates near zero. []
For oil markets, the impact is potentially double-edged.
If it weakens the U.S. currency, that could drive the price
of dollar-denominated commodities higher because they become
relatively cheap for non-dollar buyers.
But the suggestion the world's largest economy is still
flagging has negative implications for oil demand.
CHINESE BUYING FALTERS
Another trigger for selling on Tuesday was news of reduced
Chinese imports in July.
The world's second biggest energy consumer after the United
States imported 19 million tonnes or 4.47 million barrels per
day of crude in July, down 17.5 percent from June's record 5.4
million bpd, official data showed. []
In the same month overall imports rose by 22.7 percent, well
short of forecasts, and helping to drive down Chinese share
prices <> by 2.9 percent. [] European equity
markets also weakened. <.MIWD00000PUS>
The market has consistently looked to China to provide
support as energy use in the developed world has stalled and
many remain bullish for demand there, at least in relative
terms.
"I don't think more year-on-year falls are likely because
the comparison will get easier for the months of August and
September because last year's volumes were so bad," said Gordon
Kwan, head of energy research at Mirae Assets Securities.
The next indications of oil supply and demand in the United
States will emerge in data from industry body the American
Petroleum Institute later on Tuesday and from the U.S.
government Energy Information Administration on Wednesday.
A Reuters poll predicted the data would show U.S.
inventories had fallen last week by an average of 1.6 million
barrels, but would still be higher than a year ago. []
Gasoline inventories were expected to have risen slightly by
100,000 barrels and distillate stockpiles, which include heating
oil and diesel fuel, were also expected to rise, up 1.3 million
barrels on average.
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For a graphic showing the 24-hour oil technical outlook:
http://graphics.thomsonreuters.com/WT/20101008090135.jpg
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(Additional reporting by Florence Tan in Singapore; editing by
James Jukwey)
