* European coal burn up on cheap CO2 permits
* Chinese July imports down 10 pct
LONDON, Aug 21 (Reuters) - Physical prompt coal prices in Europe were steady between $90 and $95 a tonne on Tuesday as a healthy level of supply following the end of a Colombian rail workers strike balanced against the effect of rising oil prices.
The Colombian rail strike, which last nearly a month, led to supply squeezes in the Atlantic basin early in August, but analysts said the seaborne Atlantic coal market would return to a surplus by the end of August as Colombia ramps up exports.
As a result of the improved supply outlook, traders said coal prices for delivery to Europe in September were around $93.40 a tonne, while October contracts were trading around $94 and November deliveries just above $95.
"The end of Colombia's rail strike has improved the supply side, and weaker Chinese coal imports also helped subdue prices," one coal trader said, but added that higher oil prices and rising coal burn in Europe were lending support to coal prices.
Chinese coal imports dropped by 10 percent between June and July.
Front-month Brent crude prices rose back above $115 per barrel on Tuesday, while cheap carbon prices in Europe helped raise coal burn by European utilities.
A DES ARA cargo for October traded at $94 per tonne, and November saw a bid/offer range of $94 at $96 a tonne.
A Richards Bay cargo for delivery in October traded at $89.50 per tonne, and November deliveries were bid at $89.75. (Reporting by Henning Gloystein; editing by Jane Baird)