* U.S. economic data paints mixed picture on economy
* U.S. crude inventories unexpectedly rose last week - EIA
* Norwegian oil workers reach wage agreement, avert strike
* For a technical view, click: []
* Coming Up: U.S. initial jobless claims; 1230 GMT
(Adds Norwegian offshore workers strike averted, 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. []
[]
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. []
U.S. crude for July <CLc1> fell 65 cents to $77.02 a barrel
at 0702 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.
Prices also fell after Norwegian offshore oil workers
landed a wage deal with energy companies on Thursday, averting
a strike that had threatened production in three oil and gas
fields in the North Sea. []
Oil has 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.
LOST QUARTER
"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.
(Editing by Michael Urquhart)
