NEW YORK - Oil prices fell on Tuesday in choppy trading on expectations that potential central bank stimulus may not be enough to revive sputtering economic growth and as hopes dimmed that the US Federal Reserve will act this week to boost growth.

Brokers and traders also cited pressure from news that Germany's finance minister reiterated its view that there is no need to grant a banking licence to the eurozone's new bail-out fund. Such a move could enable the fund to buy large amounts of debt issued by troubled eurozone economies.

Oil received support earlier after a pledge by leaders in China, the world's biggest energy consumer, to increase fiscal and monetary support to the economy in the second half of the year.

Brent crude was on pace to post an 8% rise in July, the biggest monthly gain since February, which would snap a string of three monthly declines.

US crude is set to post a monthly gain of more than 4%, snapping a two-month streak of declines.

Brent September crude fell 50 cents to $105,70 a barrel by 3.16pm GMT, having swung from $104,93 to $106,52.

US September crude was down 90 cents at $89,88 a barrel, having dropped to $88,37 intraday.

Total crude trading volumes remained thin, with dealings for Brent and US crude around 60% below 30-day averages.

Tuesday's expiration of front-month August US gasoline and heating oil futures contracts also was expected to provide some volatility.

Slowing growth in the US, the world's top oil consumer, has fuelled expectations of stimulus measures from the Federal Reserve, which starts a two-day policy meeting on Tuesday, although caution about the likelihood the Fed will act immediately was evident as the meeting neared.

A promise last week by European Central Bank president Mario Draghi that the ECB would do whatever it takes within the bank's mandate to protect the euro raised expectations of new policy measures to solve the debt crisis when the ECB meets on Thursday.

Reuters