Oil rises as China moves to support economy; tropical storm in focus

* China halves stamp duty on stock trades to boost flagging market

* Tropical Storm Idalia expected to hit Florida as hurricane

* Fed's Powell says higher rates may be needed

(New throughout, updates prices, market activity and comments; new byline, changes dateline, previous LONDON)

HOUSTON, Aug 28 (Reuters) - Oil prices edged higher on Monday after China took steps to bolster its flagging economy, although investors remain worried about the pace of growth as well as further U.S. interest rate hikes that could dampen demand.

China halved stamp duty on stock trading in its latest attempt to boost struggling markets. The market is also keeping an eye on Tropical Storm Idalia and any risk it poses to oil and gas output in the U.S. Gulf.

Brent crude rose 21 cents, or 0.3%, to $84.69 a barrel by 11:22 a.m. ET (1520 GMT). Its session high was over $85. U.S. West Texas Intermediate crude gained 43 cents, or 0.6%, to $80.27.

The focus today is on "China actions to support its economy, Tropical Storm Idalia heading for Florida and whether Brent can regain momentum on a break above $85," said Ole Hansen, head of commodity strategy at Saxo Bank.

Idalia was intensifying as it approached Cuba, according to the latest update. Its most likely impact was a day or two of power outages, said IG market analyst Tony Sycamore. That "should see some short-term support for the oil price", he said.

Brent and U.S. crude posted a second week of losses on Friday after Federal Reserve Chair Jerome Powell said the U.S. central bank may need to raise rates further to cool still-too-high inflation.

"The looming expectations of yet higher interest rates is keeping a nervous trade to crude," said Dennis Kissler, senior vice president of trading at BOK Financial.

Personal consumption expenditures price index, the Fed's preferred inflation gauge, is set to be released on Thursday and the non-farm payrolls data is due on Friday.

Oil prices have remained above $80 a barrel with support from falling oil inventories and supply cuts from the OPEC+ group of oil producers.

Saudi Arabia is expected to extend a voluntary oil output cut of 1 million barrels a day into October, analysts told Reuters last week, as the kingdom seeks to provide further support for the market. (Additional reporting by Alex laweler in London, Florence Tan and Sudarshan Varadhan; editing by Jason Neely, Kirsten Donovan, Louise Heavens, Sharon Singleton and David Gregorio)