World oil prices sank on Tuesday, with Brent sliding back under the $100 level after the Norwegian government acted to end an oil workers' strike, while sentiment was also hit by weak Chinese data.

Brent North Sea crude for delivery in August shed $1.16 to $99.16 per barrel in late morning deals in London.

New York's main contract, light sweet crude for August shed 46 cents to stand at $85.53 a barrel.

"Oil prices are starting the new day of trading significantly down," said Commerzbank analyst Carsten Fritsch.

"The government in Norway has declared the more than two-week-long strike in the oil and gas industry to be over, just before the lockout came into effect.

"A lockout would have paralysed the entire oil production of the world's eighth-largest oil exporter, totalling up to two million barrels per day.

"Thus one of the key factors lending support to oil prices in recent days has now fallen away."

Norway's government intervened to end a 16-day oil strike just minutes ahead of a threatened lockout on Tuesday that would have halted production by western Europe's largest crude exporter.

"The strike is over," labour ministry spokesman Jan Richard Kjelstrup told AFP after the last-ditch deal, which had sent North Sea crude prices plunging below the key $100 threshold.

The dispute over pensions between unions and employers will now go to binding arbitration.

The lockout would have prevented more than 6,500 people from going to work on the Norwegian continental shelf and cut off production of about two million barrels of oil equivalent a day.

Market sentiment was also dented on Tuesday by fresh fears about the oil demand outlook for China, which is the world's biggest energy consuming nation.

"Disappointing Chinese import figures are adding to the burden on prices," added Fritsch.

"China imported considerably less crude oil in June due to the fact that refineries sharply cut their capacity utilization last month.

"According to the Chinese customs authorities, crude imports plunged 12 percent month-on-month to 5.29 million barrels per day, the country's lowest import level this year.

He added: "The reduced oil demand from China could result in a further increase in the already considerable oversupply on the oil market, thus precluding any further recovery of oil prices."

China's trade surplus meanwhile expanded in June as demand for imports fell more sharply than expected, stoking concerns about a slowdown in the world's second-biggest economy, official data also showed.

The trade surplus hit $31.73 billion in June, up 42.9 percent from the same month last year, the General Administration of Customs said.

While exports for the month rose 11.3 percent year-on-year to $180.21 billion, imports climbed just 6.3 percent to reach $148.48 billion.

China's leaders have already moved to revive growth, raising interest rates twice since the beginning of June, and the trade data fuelled expectations that they will act again over the next few months.

burs-rfj/hd