UPDATE 9-Brent oil in bear market as China-U.S. trade tensions mount

* U.S.-China trade war stokes concerns over global growth
* Traders look to U.S. inventory data

(Updates with settlement prices, adds move to bear market)
By Jessica Resnick-Ault
NEW YORK, Aug 6 (Reuters) - Oil prices fell more than 1% on
Tuesday, with Brent crude settling near seven-month lows below
$60 a barrel as trade tensions between the U.S. and China
intensified worries about weakening global demand.
During the session, Brent traded at a low of $58.81 a
barrel, down more than 22% from its peak in April. That decline
puts the global benchmark in "bear market" territory.
Brent prices have lost more than 9% in the past week, with
U.S. President Donald Trump vowing to impose new tariffs on
Chinese imports and Beijing making further moves against U.S.
agricultural cargoes.
The United States also responded to a decline in China's
yuan on Monday by branding China a currency manipulator. Trump
on Tuesday dismissed concerns over a protracted trade war with
China, as Beijing warned that Washington's decision the day
before would lead to chaos in financial markets.
International benchmark Brent futures LCOc1 fell 87 cents,
or 1.45%, to settle at $58.94 a barrel.
West Texas Intermediate crude CLc1 futures were down
$1.06, or 1.94%, at $53.63 a barrel.
"As far as the oil market is concerned, there are two key
questions: 1) Why should China carry on buying U.S. crude oil?
and 2) Why should China continue to adhere to the U.S. sanctions
when it comes to buying Iranian oil?" Commerzbank analyst
Carsten Fritsch said in a note.
Global equities hit a two-month low .MIWD00000PUS and
Brent fell more than 3% on Monday as traders worried the dispute
between the world's two biggest oil buyers would dent demand,
helping to prompt Tuesday's short-covering.
"It's difficult for oil to hold (up) when you have such
moves in equities," Petromatrix analyst Olivier Jakob said.
Oil prices found little encouragement as the U.S. government
forecast that growth in the Permian basin and other shale
formations would largely offset production losses from the Gulf
of Mexico due to Hurricane Barry. EIA/M
Crude could still find some support after the market settles
on Tuesday, with a Reuters poll showing U.S. crude oil
inventories were expected to have fallen for an eighth
consecutive week. API/S
The American Petroleum Institute is set to release its
weekly inventory data at 4:30 p.m. EDT (2030 GMT), with official
government numbers to follow on Wednesday.
On the supply side, Iran has threatened to block all energy
exports out of the Strait of Hormuz, through which a fifth of
global oil traffic passes, if it is unable to sell oil as
promised by a 2015 nuclear deal in exchange for curbing uranium
enrichment. Britain on Monday joined the United States in a maritime
security mission in the Gulf to protect merchant vessels after
Iran seized a British-flagged vessel.