UPDATE 1-Oil falls towards $77 on mixed U.S. econ, stocks data

                                
 * U.S. economic data paints mixed picture on economy
                                
 * U.S. crude inventories unexpectedly rose last week -EIA
                                
 * Coming Up: U.S. initial job claims; 1230 GMT
                                
 * For a technical view, click: [ID:nSGE65G00A]
 (Adds BP fund, Brent premium over WTI, updates prices)
                                
 By Alejandro Barbajosa
                                
 SINGAPORE, June 17 (Reuters) - Oil retreated by 0.8 percent
towards $77 on Thursday, slipping from its highest since early
May, as the pace of demand growth was questioned following
mixed economic and inventory data from top consumer the United
States.
                                
 U.S. industrial production rose faster than forecast in
May, while housing starts fell more than expected. And the
nation's demand for distillate fuel including heating oil and
diesel jumped over the past four weeks, while crude inventories
posted a surprise increase last week. [ID:nN16144404]
[ID:nN16162182]
                                
 Renewed concerns about Spain's credit and banking system
toppled the euro from a two-week high against the dollar on
Wednesday. The greenback extended gains on Thursday, up about
0.3 percent against a basket of currencies. <.DXY>
                                
 European Union leaders hope to agree on ways to strengthen
budget discipline and economic policy coordination on Thursday
to show financial markets they can manage the euro zone debt
crisis. [ID:nLDE65F2IR]
                                
 U.S. crude for July <CLc1> fell 58 cents to $77.09 a barrel
at 0507 GMT, having touched $78.13 on Wednesday, the highest
intraday price since May 10. ICE Brent for August <LCOc1> slid
28 cents to $77.86.
                                
 "The poorer than expected housing data and the unexpected
gains in crude inventories are weighing on prices," said Serene
Lim, a Singapore-based oil analyst at ANZ.
                                
 "Investors will be quite jittery about the euro, and the
strength of the dollar will cap gains in oil," Lim said.
                                
 A stronger dollar makes imports more expensive for holders
of other currencies.
                                
 Oil prices have recovered by about 19 percent from this
year's low below $65 on May 20. Some analysts say the rebound
responds to a clearer perception that the effect of Europe's
debt crisis on energy demand will be limited.
                                
 "The true likely importance of European debt concerns has
perhaps now been better quantified, and the focus seems to have
shifted to threats that might moderate growth in specific
regions, rather than fears that the entire global economic
recovery will be derailed," Barclays Capital said in a weekly
report.
                                
 "With economic fears abounding, the second quarter has
proved something of a lost quarter for oil prices," the bank
said.
                                
 Overall oil product demand in the U.S. advanced by 1.9
percent in the past four weeks from a year earlier, the Energy
Information Administration said in a weekly report on
Wednesday.
                                
 Distillate use jumped almost 14 percent in the same period.
                                
 But the nation's crude stockpiles rose unexpectedly last
week by 1.7 million barrels on the back of higher imports and
lower refinery utilisation, the EIA said.
                                
 Crude oil stocks at the Cushing, Oklahoma pricing point for
U.S. crude futures rose by 200,000 barrels to 37.6 million
barrels, EIA said.
                                
 The persistence of abundant supplies at the hub is
depressing the price of front-month West Texas Intermediate
crude relative to European benchmark Brent, which was trading
about 85 cents higher on Thursday, compared with less than a
50-cent premium for Wednesday's settlement.
                                
 U.S. gasoline inventories registered an unexpected drop of
700,000 barrels last week, while gasoline demand declined by
0.2 percent in the past four weeks from a year earlier, the EIA
said.
                                
 U.S. President Barack Obama pushed a deal on Wednesday that
would see BP Plc <BP.L><BP.N> set up a $20 billion fund for
damage claims from its huge Gulf of Mexico oil spill, sell
assets and suspend dividend payments to shareholders.
[ID:nN15112656]
                                
 The deal gave Obama his most tangible success since the
crisis began 58 days ago, with criticism over his handling of
the worst oil spill in U.S. history hurting the president in
opinion polls as his fellow Democrats gear up for tough
congressional elections in November.
                                
 The fund, which BP will finance partly by selling $10
billion in assets, also eased public pressure on the British
energy giant, whose share price has withered amid uncertainty
over the ultimate cost of cleanup, claims and fines.
[ID:nN16175007]
 (Editing by Ed Lane)