* Huge US gasoline, distillate stockbuild and firm dlr weigh
* Crude draw, Nigeria limit losses; buying seen on dips
* Fears over economy stay; US imports soft even with recovery
By Ramthan Hussain
SINGAPORE, June 25 (Reuters) - Oil fell towards $68 a barrel on Thursday, after U.S. fuel inventories rose by more than expected and the dollar held steady, as concerns over the health of the world economy persisted.
Gasoline stocks in the world's top consumer rose 3.9 million barrels last week, far exceeding analysts' predictions, as refiners prepared for the peak driving season, which is expected to be less robust this year, while distillates hit 10-year highs.
But analysts said the price drop was limited by the sharp 3.8 million barrel decline in U.S. crude stocks.
U.S. crude futures for August fell 8 cents to $68.59 a barrel by 0329 GMT, after shedding 0.8 percent on Wednesday. London Brent crude lost 8 cents to $68.25 a barrel.
"The EIA report which shows a large increase in products stocks was a negative factor for oil prices. But we are seeing that with oil falling from the high $60s, buying support emerged and limited the downside," said David Moore, commodity strategist at Commonwealth Bank in Sydney.
The big build in U.S. gasoline stocks contrasted with industry projections that U.S. travel over the July 4 Independence Day holiday weekend will drop almost 2 percent this year versus 2008.
Analysts see key resistance around $73.23, the near eight-month high hit on June 11, while support will hover at the low $60s over the next month.
The U.S. dollar kept most of its gains made after the Federal Reserve signalled it was making no change to its steps to support the economy, but it began to lose its hold slightly as Asian share markets opened positively.
A firmer dollar makes commodities priced in dollars more expensive for holders of other currencies.
Optimism over a potential recovery lifting oil demand has raised prices from below $40 over the past three months, though fears about the global economy have resurfaced and the Fed said the climate would stay weak for some time in the United States.
And government forecasters said that even though U.S. oil demand should rebound when the economy recovers, crude oil imports might not resume growth as quickly as they did when past recessions ended because of new domestic oil production coming onstream.
Multiple militant attacks on pipelines and oil installations in OPEC member Nigeria recently have forced production stoppages, and offered some support to prices, though analysts said such regular disruptions have largely been factored in by the market. (Editing by Ben Tan)