* U.S. retail sales rise more than expected in December
* Crude, gasoline stocks seen rising on higher U.S. imports-poll
* U.N. nuclear inspectors to meet Iranian officials Wednesday
* U.S. crude stocks up less than expected last week-API
* Coming Up: EIA oil data 10:30 a.m. EST Wednesday (Adds API data paragraphs 11-14)
By Matthew Robinson
NEW YORK, Jan 15 Oil prices dipped in heavy trading on Tuesday, weighed down by German economic data and concerns about the brewing fight over the U.S. debt ceiling stoked concerns about fuel demand.
Crude prices were pressured early by data that showed the German economy contracted by 0.5 percent in the fourth quarter, more than had been expected. Oil markets have been weighed down by ongoing worries about the U.S. and euro zone economies over the past year and by struggling fuel demand.
Pressure also came from the debate over the U.S. debt limit, with traders eyeing comments from Federal Reserve Chairman Ben Bernanke who on Monday urged U.S. lawmakers to lift the country's ceiling to avoid a potentially disastrous default.
"I think the warnings by the Fed Chairman about the debt ceiling seems to have taken the wind out of yesterday's strong close," said Gene McGillian, analyst for Tradition Energy in Stamford, Connecticut, referring to gains seen in Brent and U.S. crude on Monday.
"You also had contracting German GDP which also throws a little cold water on the idea the economy is improving nicely."
Front-month Brent crude for February delivery, which expires on Wednesday, fell more deeply than later months, trading down $1.58 to settle at $110.30 a barrel. The more heavily traded March Brent contract fell $1.32 to settle at $109.63 a barrel.
U.S. oil fell 86 cents to settle at $93.28 a barrel, edging down to below 64 on the 14-day relative strength index, after touching the 70 level on Monday, typically viewed as a technical signal that a commodity has been overbought.
Brent trading volumes were strong, up nearly 34 percent from the 30-day moving average, while U.S. crude was nearly 30 percent higher than that average.
While most of the oil complex traded lower, gas oil futures were up slightly for most of the day before edging lower late, supported by cold weather in Europe. Trading volumes were more than double the 30-day moving average.
In addition to fuel demand concerns, oil received pressure from expectations weekly U.S. oil inventory reports would show builds crude oil and refined products inventories.
U.S. crude stocks rose by only 46,000 barrels last week, according to the American Petroleum Institute's report released late on Tuesday, far less than the increase of 2.3 million barrels forecast in a Reuters survey of analysts.
Gasoline stocks rose 4.1 million barrels and distillate stocks fell 568,000 barrels, the API said.
Gasoline stocks were seen up only 2.9 million barrels, while distillate stocks were expected to have risen 1.9 million barrels, according to the Reuters survey.
The U.S. Energy Information Administration's inventory report will follow on Wednesday at 10:30 a.m. EDT (1530 GMT).
Analysts said oil prices found some support from data showing U.S. retail sales rose more than expected in December as Americans shrugged off the threat of higher taxes and bought a range of goods, suggesting momentum in consumer spending as the year ended.
Worries about supply disruptions from the Middle East have helped counter demand weakness in recent months. A senior U.N. nuclear watchdog official said on Tuesday he was aiming for an agreement with Iran this week on a framework deal enabling his inspectors to investigate suspected nuclear bomb research.
The West has applied the toughest sanctions ever in an attempt to force Tehran to end its nuclear program. Iran, which says it needs the technology to generate electricity, has threatened to block the Strait of Hormuz if it is attacked. (Reporting by Matthew Robinson in New York; Ron Bousso in London; Manash Goswami in Singapore; Editing by Nick Zieminski, Marguerita Choy and Bob Burgdorfer)