Oil rebounds from 3-wk lows; economy worries persist

                                
 * Prices head for biggest weekly drop since early May
                                
 * Coming Up: U.S. June non-farm payrolls; 1230 GMT
                                
 * For a technical view, click: [ID:nSGE66100T]
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, July 2 (Reuters) - Oil prices rebounded on
Friday from 3-week lows, but were still far from reversing the
biggest one-day drop in almost a month a day earlier, after a
spate of weak manufacturing data reflected slower global
economic growth.
                                
 Investors will seek further direction from Friday's U.S.
unemployment report for June, with non-farm payrolls expected
to have declined 110,000 as many of the temporary workers hired
in May to complete the U.S. census were laid off.
[ID:nN29266671]
                                
 Manufacturing growth cooled around the world in June,
reports from China, Europe and the U.S. showed on Thursday,
adding to evidence that the global economic recovery is losing
steam. [ID:nN01124857]
                                
 U.S. crude for August <CLc1> rose 15 cents to $73.11 a
barrel by 0305 GMT, after touching $72.05 on Thursday, the
lowest intraday price since June 9. Front-month WTI has
declined every day this week before Friday, with the biggest
drop on Thursday, when it slumped 3.5 percent.
                                
 "The market still needs to see strong signs of recovery to
move higher," said Ken Hasegawa, a commodity derivatives
manager at brokerage Newedge in Japan.
                                
 Japan's Nikkei average edged up 0.4 percent on Friday after
five straight days of falls as charts showed the benchmark
deeply oversold, while the euro held near five-week highs
against the dollar. [ID:nTOE66008E] [ID:nSGE6600MS]
                                
 Oil prices on Friday were tracking stock markets higher,
rising for the first time this week, but were still poised for
their biggest weekly drop in percentage terms since early May,
as Hurricane Alex dissipated over central Mexico, having spared
most oil facilities in the Gulf of Mexico.
                                
 Producers on Thursday were already restarting some of the
421,350 barrels per day (bpd) of oil output, about a quarter of
the U.S. Gulf of Mexico total, that were shut as a precaution.
[ID:nN29TORMFA]
                                
 On Monday prices rose above $79 to the highest level since
May 6 as Alex regained strength in the gulf, forcing the
shutdown of two Mexican loading terminals.
                                
 "This market tried to touch the upper end of the $70-$80
trading range but it failed. Now it is time to go to the lower
limit," said Hasegawa.
                                
 New claims for U.S. jobless benefits unexpectedly rose last
week, heightening concern that the economic recovery of the
world's largest oil consumer was stalling. [ID:nN01108492]
                                
 "If the jobs number is bad, prices will extend losses
toward $70," Hasegawa said about Friday's monthly unemployment
report.
                                
 The ISM report also disappointed markets on Thursday, as
did data showing pending sales of previously owned U.S. homes
plunged a record 30 percent in May to an all-time low.
                                
 Energy data provider Genscape said on Thursday that
Cushing, Oklahoma crude stocks fell 285,000 in the week to
Tuesday, reducing a glut that has depressed front-month U.S.
crude prices relative to contracts for later delivery.
[ID:nNYS008018]
 (Editing by Clarence Fernandez)