LONDON (AFP) - Oil prices dived under 69 dollars on Tuesday as rising supplies, dollar strength and weak equities helped reverse an earlier rally that was sparked by record crude imports in key energy consumer China. New Yorks main contract, light sweet crude for September, tumbled as low as 68.71 dollars per barrel. It later stood at 69.23, down 1.37 dollars from Mondays closing level. London Brent North Sea crude for delivery in September fell 1.07 dollars to 72.43 dollars a barrel in late afternoon trade. Supply (of oil) is abundant relative to short-term demand, says Peter Donovan, vice president of Vantage Trading, cited by Dow Jones Newswires. European stock markets meanwhile fell sharply on Tuesday as investors awaited the outcome of a US Federal Reserve meeting, with London losing 1.08 percent and Frankfurt plunging 2.44 percent. Wall Street also skidded lower on Tuesday as investors awaited the Feds latest decision on monetary policy and its guidance on the outlook for recovery from the sharp US recession. In early morning oil trading here, London Brent had surged as high as 74.20 dollars per barrel. Prices found support this morning on some bullish preliminary Chinese trade data, which show crude imports hit a record high of 4.635 million barrels per day (mbpd), said Barclays Capital analysts in a note to clients. They added that Chinese imports were far higher than the previous record peak of 4.085 mbpd that was recorded in March 2008. China is the worlds second biggest energy consuming nation after the United States. Last week, oil had struck a 10-month peak of 76 dollars in London, aided by positive signs of global economic recovery. Increasing signs pointing to a potential rebound in demand have lent support to commodity prices, Barclays Capital analysts added. At the same time, however, there is a growing pool of opinion that China may turn into a bearish factor in the second half of 2009. Chief among such concerns are a possible tightening in Chinas monetary policy, evidence that the central government has fully disbursed its planned investment spending for the full year, and speculative stockpiling. Oil fell Monday amid concerns over a strengthening US currency, which makes dollar-priced oil more expensive for buyers using weaker currencies. In turn, that tends to dampen demand. On Tuesday, market sentiment was partly boosted after OPEC stuck to its forecast of a rebound for energy demand next year. World oil demand will decline slightly in 2009 but start growing again next year, the OPEC oil producers cartel said earlier on Tuesday in its monthly report, standing by a previous forecast. The forecast for world oil demand growth in 2009 remains unchanged, showing a decline of 1.6 million barrels per day (bpd), or 1.93 percent to 83.91 million bpd, the Organization of Petroleum Exporting Countries (OPEC) said. In 2010, the trend was expected to reverse, with demand growing by 0.5 million bpd, or 0.59 percent, as already predicted in OPECs July report. Oil prices had forged historic peaks above 147 dollars a barrel in July last year. But they went on to plummet to near 30 dollars in December after a financial and economic crisis ravaged global oil demand. Prices have since clawed back, driven in part by hopes of an early rebound for the world economy.