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NEW YORK (Reuters) - Oil suffered its biggest one-day percentage loss of the year on Tuesday, hitting a seven-week low as concerns about a potential slowdown in the economy of No. 2 crude consumer China added to worries about global demand.
March trade data showed China's import growth fell below expectations, indicating tepid first-quarter demand, although imports of crude oil remained high, at the third highest level on record.
"Cumulative economic concerns are haunting the market again with China's import data, last week's U.S. jobs report and Europe still under pressure," said Tom Bentz, director at BNP Paribas Prime Brokerage Inc in New York.
The Chinese data added to overall worries about the global economy, after weak U.S. jobs data late last week dragged oil prices lower on Monday. Oil prices this year have been balancing concerns about demand against supply disruptions - including the potential loss of exports from OPEC member Iran.
The U.S. Energy Information Administration also fed market pessimism with a monthly report that cut its forecast for world oil demand growth for 2012 and 2013, while raising the forecast for non-OPEC oil output.
Brent crude fell $2.79 to settle at $119.88 a barrel, the weakest close since February 17, having dropped below the 50-day moving average of $121.84. The 2.27 percent slide was the biggest one-day percentage loss since December 14.
The front-month Brent May contract expires on Friday.
U.S. crude dropped $1.44 to settle at $101.02 a barrel, the lowest close since February 14, having pushed below the 100-day moving average of $101.65.
Fears of slowing growth swept across commodities and stock markets, pushing the S&P 500 down for a fifth straight day, and sent copper to a three-month low. .N <MET/L>
U.S. Treasuries prices rose, as worried traders looked for safer havens. <US/>
"The entire risk asset market is lower today," said Dominick Chirichella, Senior Partner at Energy Management Institute in New York.
"The data out of China is bearish for oil and Europe is looking scary again. If the Iran talks go badly, the fear premium will come back, but I think crude will be the leader in the complex, not gasoline as it has been," Chirichella added.
Oil prices briefly curbed losses on news that Iran cut oil exports to Spain and may halt shipments to Germany and Italy ahead of talks with world powers this weekend.
Sanctions by the European Union and the United States, aimed at curbing Tehran's nuclear ambitions, have already reduced imports by some European countries, according to industry sources.
Brent crude's premium to its U.S. counterpart narrowed to $18.86 a barrel, based on settlements. Analysts said the premium could narrow further if the nuclear talks with Iran yielded results.
Goldman Sachs on Tuesday forecast the spread could narrow further in the second half of the year as the reversal of the Seaway pipeline alleviated a glut of crude in the Midwest which has depressed the price of U.S. oil futures.
Brent trading volume outpaced turnover for U.S. crude as European traders returned from the Easter holiday. U.S. volumes neared the 30-day average.
U.S. RBOB gasoline and heating oil futures also fell more than 1 percent.
The International Monetary Fund added to concerns about slower growth, telling commodity exporters to brace for lower prices given weak global economic activity.
U.S. crude stockpiles jumped 6.6 million barrels last week, the industry group American Petroleum Institute said in a report released after oil prices settled, much more than expected by analysts. <API/S>
Gasoline stocks rose 1.2 million barrels and distillate stocks fell 476,000 barrels, the API said.
Crude stocks were expected to be up 2.1 million barrels, a Reuters survey of analysts taken ahead of the API report showed.
Gasoline stocks were expected to be down 1.3 million barrels and distillate stocks down, but only by 200,000 barrels.
The government's data from the EIA will follow on Wednesday at 10:30 a.m. EDT (1430 GMT).
Additional reporting by Gene Ramos in New York, Ikuko Kurahone in London and Manash Goswami in Singapore; Editing by Dale Hudson, Alden Bentley, David Gregorio and Andre Grenon