Oil falls as dollar firms

SINGAPORE (Reuters) - Oil fell on Tuesday as the U.S. dollar firmed to six-month highs, countering concerns over possible supply disruptions due to the Russia-Georgia clash.

Worries over slowing global demand also put prices under pressure, after world No. 2 consumer China posted a surprise drop in July crude imports.

U.S. crude fell 45 cents to $114.00 a barrel by 3:24 a.m. British time, while London Brent crude fell 26 cents to $112.41.

"Oil prices have again sagged lower despite the potential threat that the Russia-Georgia conflict poses to oil supplies. The firm U.S. dollar is weighing on the oil price," David Moore, an analyst at the Commonwealth Bank of Australia, said in a note.

The U.S. dollar rose to a six-month high against the euro as concerns over the global economy have kept other major currencies under pressure.

Investors had bought oil and other commodities such as gold in earlier months as a hedge against inflation and a weak U.S. dollar, helping push oil prices to a record above $147 in July.

Crude oil had risen sevenfold at its peak last month, after climbing for six years on growing demand from China and other developing economies.

But worries over a slowdown in global demand were given impetus after China reported an unexpected 7 percent fall in July crude oil imports, the steepest monthly drop since January 2005.

"I think it's going to be a short-term issue. From the market point of view, it will be more interesting to see what happens after the Olympics," said Gerard Burg, a commodities analyst at National Australia Bank in Melbourne.