UPDATE 2-Oil rises on dollar; falling equities cap gains

                                
   * Japan Q2 GDP growth slower than expected
                                
 * Coming Up: U.S. New York Fed manufacturing, Aug
                                
 * For a technical view, click: [ID:nSGE67F00S]
 (Adds graphic on correlation with stocks, euro, updates
prices)
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, Aug 16 (Reuters) - Oil rose towards $76 on
Monday, boosted by a weaker dollar, while a fall in Asian stock
markets on news of a slowdown in Japan's economic growth capped
gains.
                                
 The economy of Japan, the world's third-largest oil user,
slowed to a crawl in the second quarter, up a
smaller-than-expected 0.1 percent, knocking down the Nikkei by
about 0.6 percent and adding to concerns about a faltering
recovery in some major oil consuming nations. [MKTS/GLOB]
                                
 This follows a string of tepid U.S. macroeconomic
indicators last week that forced oil prices down by more than 6
percent, the biggest weekly drop since early July.
                                
 "A lot of economic data from the U.S., the euro zone and
even from Japan will have some effect on crude oil, while the
currency market will remain an important driver," Ken Hasegawa,
a commodity derivatives manager at brokerage Newedge in Japan,
said after the Japanese gross domestic product report.
                                
 U.S. crude for delivery in September <CLc1> climbed 43
cents to $75.82 a barrel at 0647 GMT. Prices touched $75.01 on
Friday, the lowest level for a front-month contract since July
13. ICE Brent crude <LCOc1> gained 41 cents to $75.52.
                                
 "It's easy to go down below $75, it's not so big support,"
Hasegawa said. "But the market is still technically supported
above $70."
                                
 The dollar weakened about 0.5 percent against a basket of
currencies on Monday, making oil cheaper for holders of other
currencies. Last week, the greenback posted its best week
against major currencies in nearly two years.
                                
 For a graphic on oil's correlation with stocks, currencies:
http://graphics.thomsonreuters.com/gfx/ABE_20101608143553.jpg
                                
 CONFIDENCE DWINDLES
                                
 Data releases on Friday showing a slight rise in U.S.
consumer confidence for early August and a small advance in
retail sales in July were not enough to sustain confidence in
the economy of the world's top oil consumer.
                                
 Oil prices last week also fell because of a rise in U.S.
jobless claims and sustained gains in the nation's fuel
inventories, further signs that energy demand is trailing the
economic recovery.
                                
 But European economic growth accelerated sharply in the
second quarter of 2010 as Germany's best growth performance
since reunification more than made up for the struggles of
Spain, Ireland and recession-ravaged Greece.
                                
 On the weather front, an area of low pressure over
southwest Georgia could move southward into Gulf of Mexico
waters by early Monday and has a medium chance of becoming a
tropical cyclone in the next 48 hours, the National Hurricane
Center said late on Sunday. [ID:nN15217883]
                                
 The low pressure area was the remnant of Tropical
Depression Five, which dissipated on Wednesday in the Gulf,
home to about 30 percent of U.S. oil production, 11 percent of
natural gas output, and more than 43 percent of U.S. refinery
capacity.
 (Editing by Himani Sarkar)